EXHIBIT 10.1
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CREDIT AGREEMENT
Dated as of April 2, 2004
among
DARLING INTERNATIONAL INC.
as Borrower,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
and
COMERICA BANK
as Revolving Credit Agent and Lender
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT.________________________________________________________________________________________1
1.1 Credit Facilities._________________________________________________________________________________________________1
1.2 Letters of Credit._________________________________________________________________________________________________3
1.3 Prepayments._______________________________________________________________________________________________________3
1.4 Use of Proceeds.___________________________________________________________________________________________________5
1.5 Interest and Applicable Margins.___________________________________________________________________________________5
1.6 Intentionally Omitted._____________________________________________________________________________________________8
1.7 Intentionally Omitted._____________________________________________________________________________________________8
1.8 Cash Management Systems.___________________________________________________________________________________________8
1.9 Fees.______________________________________________________________________________________________________________8
1.10 Receipt of Payments._______________________________________________________________________________________________9
1.11 Application and Allocation of Payments.____________________________________________________________________________9
1.12 Loan Account and Accounting.______________________________________________________________________________________10
1.13 Indemnity.________________________________________________________________________________________________________11
1.14 Access.___________________________________________________________________________________________________________12
1.15 Taxes.____________________________________________________________________________________________________________13
1.16 Capital Adequacy; Increased Costs; Illegality.____________________________________________________________________14
1.17 Single Loan.______________________________________________________________________________________________________16
1.18 Joinder of Additional Credit Parties._____________________________________________________________________________16
1.19 Increase in Revolving Loan and Revolving Lender Commitments.______________________________________________________18
2. CONDITIONS PRECEDENT______________________________________________________________________________________________18
2.1 Conditions to the Initial Loans.__________________________________________________________________________________18
2.2 Further Conditions to Each Loan.__________________________________________________________________________________20
3. REPRESENTATIONS AND WARRANTIES____________________________________________________________________________________21
3.1 Corporate Existence; Compliance With Law._________________________________________________________________________21
3.2 Executive Offices, Collateral Locations Not Owned or Leased, Fein.________________________________________________22
3.3 Corporate Power, Authorization, Enforceable Obligations.__________________________________________________________22
3.4 Financial Statements and Projections._____________________________________________________________________________23
3.5 Material Adverse Effect.__________________________________________________________________________________________23
3.6 Ownership of Property; Liens; Rolling Stock.______________________________________________________________________24
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3.7 Labor Matters.____________________________________________________________________________________________________25
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.________________________________________25
3.9 Government Regulation.____________________________________________________________________________________________25
3.10 Margin Regulations._______________________________________________________________________________________________26
3.11 Taxes.____________________________________________________________________________________________________________26
3.12 Erisa.____________________________________________________________________________________________________________27
3.13 No Litigation.____________________________________________________________________________________________________27
3.14 Brokers.__________________________________________________________________________________________________________28
3.15 Intellectual Property.____________________________________________________________________________________________28
3.16 Full Disclosure.__________________________________________________________________________________________________28
3.17 Environmental Matters.____________________________________________________________________________________________28
3.18 Insurance.________________________________________________________________________________________________________29
3.19 Deposit and Disbursement Accounts.________________________________________________________________________________30
3.20 Customer and Trade Relations._____________________________________________________________________________________30
3.21 Agreements and Other Documents; Earn Out Obligations._____________________________________________________________30
3.22 Solvency._________________________________________________________________________________________________________30
3.23 Subordinated Debt.________________________________________________________________________________________________31
4. FINANCIAL STATEMENTS AND INFORMATION______________________________________________________________________________31
4.1 Reports and Notices.______________________________________________________________________________________________31
4.2 Communication With Accountants.___________________________________________________________________________________31
5. AFFIRMATIVE COVENANTS_____________________________________________________________________________________________31
5.1 Maintenance of Existence and Conduct of Business._________________________________________________________________31
5.2 Payment of Charges._______________________________________________________________________________________________32
5.3 Books and Records.________________________________________________________________________________________________32
5.4 Insurance; Damage to or Destruction of Collateral.________________________________________________________________33
5.5 Compliance With Laws._____________________________________________________________________________________________34
5.6 Supplemental Disclosure.__________________________________________________________________________________________34
5.7 Intellectual Property.____________________________________________________________________________________________35
5.8 Environmental Matters.____________________________________________________________________________________________35
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases.____________________________36
5.10 Rolling Stock.____________________________________________________________________________________________________37
5.11 Post Closing and Delayed Delivery Requirements.___________________________________________________________________37
5.12 Further Assurances._______________________________________________________________________________________________37
6. NEGATIVE COVENANTS________________________________________________________________________________________________38
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6.1 Mergers, Subsidiaries, Etc._______________________________________________________________________________________38
6.2 Investments; Loans and Advances.__________________________________________________________________________________41
6.3 Indebtedness._____________________________________________________________________________________________________41
6.4 Employee Loans and Affiliate Transactions.________________________________________________________________________42
6.5 Capital Structure and Business.___________________________________________________________________________________43
6.6 Guaranteed Indebtedness.__________________________________________________________________________________________43
6.7 Liens.____________________________________________________________________________________________________________43
6.8 Sale of Stock and Assets._________________________________________________________________________________________44
6.9 Erisa.____________________________________________________________________________________________________________45
6.10 Financial Covenants.______________________________________________________________________________________________45
6.11 Hazardous Materials.______________________________________________________________________________________________45
6.12 Sale-leasebacks.__________________________________________________________________________________________________46
6.13 Cancellation of Indebtedness._____________________________________________________________________________________46
6.14 Restricted Payments.______________________________________________________________________________________________46
6.15 Change of Corporate Name or Location; Change of Fiscal Year.______________________________________________________46
6.16 No Impairment of Intercompany Transfers.__________________________________________________________________________47
6.17 No Speculative Transactions.______________________________________________________________________________________47
6.18 Leases; Real Estate Purchases.____________________________________________________________________________________47
6.19 Changes Relating to Subordinated Debt.____________________________________________________________________________47
7. TERM______________________________________________________________________________________________________________48
7.1 Termination.______________________________________________________________________________________________________48
7.2 Survival of Obligations Upon Termination of Financing Arrangements._______________________________________________48
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES____________________________________________________________________________48
8.1 Events of Default.________________________________________________________________________________________________48
8.2 Remedies._________________________________________________________________________________________________________50
8.3 Waivers by Credit Parties.________________________________________________________________________________________51
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENTS______________________________________________________________52
9.1 Assignment and Participations.____________________________________________________________________________________52
9.2 Appointment of Agents.____________________________________________________________________________________________54
9.3 Agents' Reliance, Etc.____________________________________________________________________________________________56
9.4 Ge Capital; Comerica and Affiliates.______________________________________________________________________________57
9.5 Lender Credit Decision.___________________________________________________________________________________________57
9.6 Indemnification.__________________________________________________________________________________________________57
9.7 Successor Agent.__________________________________________________________________________________________________58
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9.8 Setoff and Sharing of Payments.___________________________________________________________________________________58
9.9 Advances; Payments; Non-funding Lenders; Information; Actions in Concert._________________________________________60
10. SUCCESSORS AND ASSIGNS____________________________________________________________________________________________62
10.1 Successors and Assigns.___________________________________________________________________________________________62
11. MISCELLANEOUS_____________________________________________________________________________________________________63
11.1 Complete Agreement; Modification of Agreement.____________________________________________________________________63
11.2 Amendments and Waivers.___________________________________________________________________________________________63
11.3 Fees and Expenses.________________________________________________________________________________________________65
11.4 No Waiver.________________________________________________________________________________________________________66
11.5 Remedies._________________________________________________________________________________________________________67
11.6 Severability._____________________________________________________________________________________________________67
11.7 Conflict of Terms.________________________________________________________________________________________________67
11.8 Confidentiality.__________________________________________________________________________________________________67
11.9 Governing Law.____________________________________________________________________________________________________67
11.10 Notices.__________________________________________________________________________________________________________69
11.11 Section Titles.___________________________________________________________________________________________________69
11.12 Counterparts._____________________________________________________________________________________________________69
11.13 Waiver of Jury Trial._____________________________________________________________________________________________69
11.14 Press Releases and Related Matters._______________________________________________________________________________70
11.15 Reinstatement.____________________________________________________________________________________________________70
11.16 Advice of Counsel.________________________________________________________________________________________________70
11.17 No Strict Construction.___________________________________________________________________________________________70
11.18 Limitation On Security Interest With Respect to Foreign Subsidiaries._____________________________________________71
11.19 Usa Patriot Act Notification______________________________________________________________________________________71
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INDEX OF APPENDICES
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Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (Intentionally Omitted) Intentionally Omitted
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) Form of Notice of Revolving Credit Advance and
Borrowing Availability Certificate
Exhibit 1.1(a)(ii) Form of Revolving Note
Exhibit 1.1(b) Form of Term Note
Exhibit 1.5(e) Form of Notice of Conversion/Continuation
Exhibit 1.18 Form of Joinder Agreement
Exhibit 1.19 Form of Acknowledgement Agreement
Exhibit 9.1(a) Form of Assignment Agreement
Exhibit E-1 Form of Compliance Certificate
Disclosure Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.3 Insurance Policies Identified for Buyback
Disclosure Schedule 1.4 Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(A) Financial Statements
Disclosure Schedule 3.4(B) Pro Forma
Disclosure Schedule 3.4(C) Projections
Disclosure Schedule 3.6 Real Estate and Leases; Rolling Stock
Disclosure Schedule 3.7 Labor Matters
Disclosure Schedule 3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 Tax Matters
Disclosure Schedule 3.12 ERISA Plans
Disclosure Schedule 3.13 Litigation
Disclosure Schedule 3.15 Intellectual Property
Disclosure Schedule 3.17 Hazardous Materials
Disclosure Schedule 3.18 Insurance
Disclosure Schedule 3.19 Deposit and Disbursement Accounts
Disclosure Schedule 3.21 Material Agreements
Disclosure Schedule 5.1 Trade Names
Disclosure Schedule 5.9 Real Estate to be secured by Initial Mortgages
Disclosure Schedule 5.11 Post Closing Requirements
Disclosure Schedule 6.3 Indebtedness
Disclosure Schedule 6.4(a) Transactions with Affiliates
Disclosure Schedule 6.6 Existing Guaranteed Indebtedness
Disclosure Schedule 6.7 Existing Liens
This CREDIT AGREEMENT (this "Agreement"), dated as of April 2, 2004
among DARLING INTERNATIONAL INC., a Delaware corporation ("Borrower"); the other
Credit Parties signatory hereto; COMERICA BANK (in its individual capacity,
"Comerica"), for itself, as Lender, and as revolving credit agent for the
Revolving Lenders ("Revolving Credit Agent"); GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity, "GE Capital"),
for itself, as Lender, and as administrative agent for Lenders ("Administrative
Agent"), and the other Lenders signatory hereto from time to time.
RECITALS
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WHEREAS, Borrower has requested that Lenders extend revolving and
term credit facilities to Borrower of Sixty Seven Million Five Hundred Thousand
Dollars ($67,500,000) subject to adjustment pursuant to the terms of this
Agreement, for the purpose of refinancing certain indebtedness of Borrower and
to provide (a) working capital financing for Borrower, (b) for the Redemption
Dividend and the purchase and redemption of the Preferred Stock, (c) funds for
other general corporate purposes of Borrower, and (d) funds for other purposes
permitted hereunder; and for these purposes, Lenders are willing to make certain
loans and other extensions of credit to Borrower of up to such amount upon the
terms and conditions set forth herein; and
WHEREAS, Borrower has agreed to secure all of its obligations under
the Loan Documents by granting to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a security interest in and lien upon
substantially all of its existing and after-acquired personal and real property;
and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each Revolving
Lender agrees to make available to Borrower from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each,
a "Revolving Credit Advance"). The Pro Rata Share of the Revolving
Loan of any Revolving Lender shall not at any time exceed its separate
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Revolving Loan Commitment. The obligations of each Revolving Lender
hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrower may borrow, repay and reborrow under this
Section 1.1(a); provided that (i) the amount of any Revolving Credit
Advance to be made at any time shall not exceed Borrowing Availability
at such time, (ii) the amount of any Revolving Credit Advance shall
not be less than $100,000, and (iii) all of the conditions and
requirements set forth in Article 2 and this Section 1.1(a) shall have
been satisfied or waived by Administrative Agent. Each Revolving
Credit Advance shall be made on notice by Borrower to one of the
representatives of Revolving Credit Agent identified in Schedule 1.1
at the address specified therein. Any such notice must be given no
later than (1) 12:30 p.m. (New York time) on the Business Day of the
proposed Revolving Credit Advance, in the case of an Index Rate Loan,
or (2) 12:30 p.m. (New York time) on the date which is 3 Business Days
prior to the proposed Revolving Credit Advance, in the case of a LIBOR
Loan. Each such notice (a "Notice of Revolving Credit Advance") must
be given in writing (by telecopy or overnight courier) substantially
in the form of Exhibit 1.1(a)(i), and shall include the information
required in such Exhibit, including, without limitation a Borrowing
Availability Certificate, which shall set forth, among other things, a
calculation of Borrower's EBITDA, on a consolidated basis, for the
12-month period ending on the last day of the immediately preceding
Fiscal Month for which Financial Statements are available, Borrower's
Funded Debt as of the date of such Borrowing Availability Certificate,
and such other information as may be reasonably requested by Revolving
Credit Agent from time to time. If Borrower desires to have the
Revolving Credit Advances bear interest by reference to a LIBOR Rate,
Borrower must comply with Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrower shall execute
and deliver to each Revolving Lender a note to evidence the Revolving
Loan Commitment of that Revolving Lender. Each note shall be in the
principal amount of the Revolving Loan Commitment of the applicable
Revolving Lender, dated as of the Closing Date and substantially in
the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall
represent the obligation of the Borrower to pay the amount of the
applicable Revolving Lender's Revolving Loan Commitment or, if less,
such Revolving Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances to Borrower together
with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the aggregate Revolving Loan and all other non-contingent
Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.
(b) Term Loan.
(i) Subject to the terms and conditions hereof, each Term Lender
agrees to make a term loan (collectively, the "Term Loan") on the
Closing Date to Borrower in the amount of the applicable Term Lender's
Term Loan Commitment. The obligations of each Term Lender hereunder
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shall be several and not joint. Each such Term Loan shall be evidenced
by a promissory note substantially in the form of Exhibit 1.1(b) (each
a "Term Note" and collectively the "Term Notes"), and, except as
provided in Section 1.12, Borrower shall execute and deliver the Term
Note to the applicable Term Lender. The Term Note shall represent the
obligation of Borrower to pay the applicable Term Lender's Term Loan
Commitment, together with interest thereon as prescribed in Section
1.5.
(ii) Borrower shall repay the Term Loan in nineteen (19) equal,
consecutive quarterly installments of $1,250,000 on the first day of
January, April, July and October of each year, commencing July 1,
2004.
(iii) Notwithstanding Section 1.1(b)(ii), the aggregate
outstanding principal balance of the Term Loan shall be due and
payable in full in immediately available funds on the Commitment
Termination Date, if not sooner paid in full. No payment with respect
to the Term Loan may be reborrowed.
(iv) Each payment of principal with respect to the Term Loan
shall be paid to Administrative Agent for the ratable benefit of each
Term Lender making a Term Loan, ratably in proportion to each such
Term Lender's respective Term Loan Commitment.
(c) Reliance on Notices. Agents shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by
Agents to be genuine. Agents may assume that each Person executing and
delivering any notice in accordance herewith was duly authorized, unless
the responsible individual acting thereon for such Agent has actual
knowledge to the contrary.
1.2 Letters of Credit.
Subject to and in accordance with the terms and conditions contained
herein and in Annex B, Borrower, shall have the right to request, and Revolving
Lenders agree to incur, or purchase participations in, Letter of Credit
Obligations in respect of Borrower.
1.3 Prepayments.
(a) Voluntary Prepayments. Borrower may at any time on at least 3
Business Days' prior written notice by Borrower to Administrative Agent
voluntarily prepay all or part of the Term Loans; provided that any such
prepayments shall be in a minimum amount of $1,250,000 at any time;
provided further, any such voluntary prepayment must be accompanied by the
payment of any LIBOR funding breakage costs in accordance with Section
1.13(b). Any partial prepayments of the Term Loans of Borrower shall be
applied to prepay the scheduled installments of Borrower's Term Loans in
inverse order of maturity.
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(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balance of the
Revolving Loan exceeds the lesser of (A) the Maximum Amount or (B) the
Revolving Compliance Maximum, Borrower shall immediately repay the
aggregate outstanding Revolving Credit Advances to the extent required
to eliminate such excess. If any such excess remains after repayment
in full of the aggregate outstanding Revolving Credit Advances,
Borrower shall provide cash collateral for the Letter of Credit
Obligations in the manner set forth in Annex B to the extent required
to eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of proceeds of
any asset disposition (excluding proceeds of asset dispositions
permitted by Section 6.8 (a), (b), (c), (d), (e), (f), (g), (h), (j),
and (k)) or any sale of Stock of any Subsidiary of any Credit Party
(excluding proceeds resulting from issuances of Stock permitted by
Section 6.8(i)), Borrower shall prepay the Loans in an amount equal to
the Net Cash Proceeds of such disposition. Any such prepayment shall
be applied in accordance with Section 1.3(c).
(iii) If Borrower issues Stock (other than Stock issued by
Borrower as a result of the exercise of Permitted Equity Issuance or
as permitted in Section 6.8(i)), no later than the Business Day
following the date of receipt of the proceeds thereof, Borrower shall
prepay the Loans in an amount equal to the Net Cash Proceeds in
connection therewith. Any such prepayment shall be applied in
accordance with Section 1.3(c).
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to Sections 1.3(b)(ii) or (b)(iii) above shall be
applied as follows: first, to Fees and reimbursable expenses of Agents then
due and payable pursuant to any of the Loan Documents; second, to interest
then due and payable on the Term Loan; third, to prepay the scheduled
principal installments of the Term Loan in inverse order of maturity, until
the same has been prepaid in full; fourth, to interest then due and payable
on Revolving Credit Advances made to Borrower; fifth, to the principal
balance of Revolving Credit Advances outstanding to Borrower until the same
has been paid in full; and sixth, to any Letter of Credit Obligations of
Borrower to provide cash collateral therefor in the manner set forth in
Annex B, until all such Letter of Credit Obligations have been fully cash
collateralized in the manner set forth in Annex B. The Revolving Loan
Commitment shall not be permanently reduced by the amount of any such
prepayments.
(d) Application of Prepayments from Insurance and Condemnation
Proceeds. Prepayments from insurance or condemnation proceeds required to
be made in accordance with Section 5.4(d) shall be applied in accordance
with Section 1.3(c) above; provided that in no event shall any Net Cash
Proceeds received by Borrower in connection with the buyback of certain
insurance policies set forth on Disclosure Schedule 1.3, by the providers
of such policies in settlement of actual or potential Environmental
Liabilities be required to be paid as a mandatory prepayment, so long as
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the entire amount of such Net Cash Proceeds is set aside in a separate
account and earmarked as reserves for use in the defense or settlement of
any Environmental Liabilities which would have otherwise been covered by
such policies. The Revolving Loan Commitment shall not be permanently
reduced by the amount of any such prepayments. If insurance or condemnation
proceeds received by Borrower exceed the outstanding principal balances of
the Loans to Borrower the allocation and application of those proceeds
shall be determined by Administrative Agent, subject to the approval of
Requisite Lenders.
(e) No Implied Consent. Nothing in this Section 1.3 shall be construed
to constitute any Agent's or Lender's consent to any transaction that is
not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds.
Borrower shall utilize the proceeds of the Term Loan and the
Revolving Loan solely for the Refinancing (and to pay any related transaction
expenses), for the Redemption Dividend and the purchase and redemption of the
Preferred Stock as set forth in Section 6.14, for the financing of Borrower's
ordinary working capital, general corporate needs and for permitted payments on
Subordinated Debt. Disclosure Schedule 1.4 contains a description of Borrower's
sources and uses of funds as of the Closing Date, including Loans and Letter of
Credit Obligations to be made or incurred on that date, and a funds flow
memorandum detailing how funds from each source are to be transferred to
particular uses.
1.5 Interest and Applicable Margins.
(a) Borrower shall pay interest to Administrative Agent (with respect
to the Term Loan) and to Revolving Credit Agent (with respect to the
Revolving Loan), for the ratable benefit of Lenders in accordance with the
various Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at the following rates: (i) with respect to the
Revolving Credit Advances, the Index Rate plus the Applicable Revolver
Index Margin per annum or, at the election of Borrower, the applicable
LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based on
the aggregate Revolving Credit Advances outstanding from time to time; and
(ii) with respect to the Term Loan, the Index Rate plus the Applicable Term
Loan Index Margin per annum or, at the election of Borrower, the applicable
LIBOR Rate plus the Applicable Term Loan LIBOR Margin per annum;
As of the Closing Date the Applicable Margins are as follows:
Applicable Revolver Index Margin 1.50%
Applicable Revolver LIBOR Margin 2.75%
Applicable Term Loan Index Margin 1.50%
Applicable Term Loan LIBOR Margin 2.75%
Applicable L/C Margin 2.75%
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The Applicable Margins shall be adjusted (up or down) prospectively
on a quarterly basis as determined by Borrower's consolidated financial
performance, commencing with the first day of the first calendar month that
occurs more than 5 days after delivery of Borrower's quarterly Financial
Statements to Lenders for the Fiscal Quarter ending September 30, 2004.
Adjustments in Applicable Margins shall be determined by reference to the
following grid:
-------------------- -------------------- ------------------ --------------------- ------------------- -----------------
IF LEVERAGE RATIO APPLICABLE APPLICABLE APPLICABLE TERM APPLICABLE TERM APPLICABLE L/C
IS: REVOLVER INDEX REVOLVER LIBOR LOAN INDEX MARGIN LOAN LIBOR MARGIN MARGIN IS:
MARGIN IS: MARGIN IS: IS: IS:
-------------------- -------------------- ------------------ --------------------- ------------------- -----------------
> 2.00 to 1.000 1.50% 2.75% 1.50% 2.75% 2.75%
-
-------------------- -------------------- ------------------ --------------------- ------------------- -----------------
< 2.00 to 1.00 1.25% 2.50% 1.25% 2.50% 2.50%
-------------------- -------------------- ------------------ --------------------- ------------------- -----------------
All adjustments in the Applicable Margins thereafter shall be
implemented quarterly on a prospective basis, for each calendar month commencing
at least 5 days after the date of delivery to Lenders of the quarterly unaudited
or annual audited (as applicable) Financial Statements evidencing the need for
an adjustment. Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agents and Lenders a certificate, signed by a
Responsible Officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Notwithstanding
anything set forth herein to the contrary, failure to timely deliver such
Financial Statements shall, in addition to any other remedy provided for in this
Agreement, result in an increase in the Applicable Margins to the highest level
set forth in the foregoing grid, until the first day of the first calendar month
following the delivery of those Financial Statements demonstrating that such an
increase is not required. If an Event of Default has occurred and is continuing
at the time any reduction in the Applicable Margins is to be implemented, that
reduction shall be deferred until the first day of the first calendar month
following the date on which such Event of Default is waived or cured.
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR
Period) and, with respect to payments of principal, interest thereon shall
be payable at the then applicable rate during such extension. Whenever the
performance of any covenant or obligation hereunder is stated to be due on
a day which is not a Business Day, such performance shall be made on the
next preceding Business Day.
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(c) All computations of Fees calculated on a per annum basis and
interest on any LIBOR Loan shall be made by Administrative Agent (with
respect to Term Loan and Fees related thereto) and Revolving Credit Agent
(with respect to the Revolving Loan, the Letters of Credit, the Letter of
Credit Obligations, and the Fees related thereto) on the basis of a 360-day
year, in each case for the actual number of days occurring in the period
for which such interest on such LIBOR Loan and Fees are payable. All
computations of interest on any Index Rate Loan shall be made by
Administrative Agent (with respect to Term Loan) and Revolving Credit Agent
(with respect to the Revolving Loan) of the basis of a 365/366 day year, in
each case for the actual number of days occurring in the period for which
such interest is payable. The Index Rate is a floating rate determined for
each day. Each determination by either Agent of an interest rate and Fees
hereunder shall be final, binding and conclusive on Borrower, absent
manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i), or so long as any other Event of Default
has occurred and is continuing and at the election of Administrative Agent
(or upon the written request of Requisite Lenders) confirmed by written
notice from Administrative Agent to Borrower, the interest rates applicable
to the Loans and the Letter of Credit Fees shall be increased by two
percentage points (2%) per annum above the rates of interest or the rate of
such Fees otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable
to such Obligations. Interest and Letter of Credit Fees at the Default Rate
shall accrue from the initial date of such Event of Default until that
Event of Default is cured or waived and shall be payable upon demand.
(e) Borrower shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, subject to the conditions precedent
set forth in Section 2.2, (ii) so long as no Default or Event of Default
has occurred and is continuing, convert at any time all or any part of
outstanding Loans from Index Rate Loans to LIBOR Loans, (iii) convert any
LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage
costs in accordance with Section 1.13(b) if such conversion is made prior
to the expiration of the LIBOR Period applicable thereto, or (iv) continue
all or any portion of any Loan as a LIBOR Loan upon the expiration of the
applicable LIBOR Period and the succeeding LIBOR Period of that continued
Loan shall commence on the first day after the last day of the LIBOR Period
of the Loan to be continued. Any Loan or group of Loans having the same
proposed LIBOR Period to be made or continued as, or converted into, a
LIBOR Loan must be in a minimum amount of $1,000,000 and integral multiples
of $250,000 in excess of such amount. Any such election must be made by
11:00 a.m. (New York time) on the 3rd Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the
end of each LIBOR Period with respect to any LIBOR Loans to be continued as
such, or (3) the date on which Borrower wishes to convert any Index Rate
Loan to a LIBOR Loan for a LIBOR Period designated by Borrower in such
election. If no election is received with respect to a LIBOR Loan by 11:00
a.m. (New York time) on the 3rd Business Day prior to the end of the LIBOR
Period with respect thereto (or if a Default or an Event of Default has
occurred and is continuing), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period. Borrower must make such election
by notice to both Agents. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e). No Loan may be
made as or converted into a LIBOR Loan until the 3rd Business Day after the
Closing Date.
7
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that
the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the
Maximum Lawful Rate would be so exceeded, the rate of interest payable
hereunder shall be equal to the Maximum Lawful Rate; provided, however,
that if at any time thereafter the rate of interest payable hereunder is
less than the Maximum Lawful Rate, Borrower shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Agents on behalf of Lenders, is equal to the total interest
that would have been received had the interest rate payable hereunder been
(but for the operation of this paragraph) the interest rate payable since
the Closing Date as otherwise provided in this Agreement. Thereafter,
interest hereunder shall be paid at the rate(s) of interest and in the
manner provided in Sections 1.5(a) through (e), unless and until the rate
of interest again exceeds the Maximum Lawful Rate, and at that time this
paragraph shall again apply. In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the
Maximum Lawful Rate is calculated pursuant to this paragraph, such interest
shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is
made. If, notwithstanding the provisions of this Section 1.5(f), a court of
competent jurisdiction shall finally determine that a Lender has received
interest hereunder in excess of the Maximum Lawful Rate, Administrative
Agent or Revolving Credit Agent shall, to the extent permitted by
applicable law, promptly apply such excess in the order specified in
Section 1.11 and thereafter shall refund any excess to Borrower or as a
court of competent jurisdiction may otherwise order.
1.6 Intentionally Omitted.
1.7 Intentionally Omitted.
1.8 Cash Management Systems.
Borrower will establish and will maintain until the Termination Date,
the cash management systems described in Annex C (the "Cash Management
Systems").
1.9 Fees.
(a) Borrower shall pay to GE Capital, individually, the Fees specified
in that certain fee letter dated as of January 23, 2004 among Borrower and
GE Capital (the "GE Capital Fee Letter"), at the times specified for
payment therein.
(b) As additional compensation for the Revolving Lenders, Borrower
shall pay to Revolving Credit Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to the
Commitment Termination Date and on the Commitment Termination Date, a Fee
8
for Borrower's non-use of available funds in an amount equal to one-half
percent (0.50%) per annum (calculated on the basis of a 360 day year for
actual days elapsed) multiplied by the difference between (i) the Maximum
Amount (as it may be adjusted from time to time) and (ii) the average for
the period of the daily closing balances of the aggregate Revolving Loan
outstanding during the period for which such Fee is due.
(c) Borrower shall pay to Revolving Credit Agent, for the ratable
benefit of Revolving Lenders, the Letter of Credit Fee as provided in Annex
B.
1.10 Receipt of Payments.
Borrower shall make each payment under this Agreement not later than
2:00 p.m. (New York time) on the day when due in immediately available funds in
Dollars to the Collection Account. For purposes of computing interest and Fees
and determining Borrowing Availability as of any date, all payments shall be
deemed received on the Business Day on which immediately available funds
therefor are received in the Collection Account prior to 2:00 p.m. New York
time. Payments received after 2:00 p.m. New York time on any Business Day or on
a day that is not a Business Day shall be deemed to have been received on the
following Business Day.
1.11 Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is continuing, (i)
payments matching specific scheduled payments then due shall be applied to
those scheduled payments; (ii) voluntary prepayments shall be applied as
determined by Borrower, subject to the provisions of Section 1.3(a); and
(iii) mandatory prepayments shall be applied as set forth in Sections
1.3(c) and 1.3(d). All payments and prepayments applied to a particular
Loan shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share. As to any other payment, and as to all
payments made when an Event of Default has occurred and is continuing or
following the Commitment Termination Date, Borrower hereby irrevocably
waives the right to direct the application of any and all payments received
from or on behalf of Borrower, and Borrower hereby irrevocably agrees that
each Agent shall have the continuing exclusive right to apply any and all
such payments against the Obligations of Borrower as such Agent may deem
advisable notwithstanding any previous entry by such Agent in the Loan
Account or any other books and records. In the absence of a specific
determination by Administrative Agent with respect to the Term Loan and any
Interest or Fees not related to the Revolving Loan, or by Revolving Credit
Agent with respect to the Revolving Loan and any Interest or Fees not
related to the Term Loan, payments (with respect to each respective Loan)
shall be applied to amounts then due and payable in the following order:
(1) to Fees and Agents' expenses reimbursable hereunder; (2) to interest on
the Loans, ratably in proportion to the interest accrued as to each Loan;
(3) to principal payments on the Loans and to provide cash collateral for
Letter of Credit Obligations in the manner described in Annex B, ratably to
the aggregate, combined principal balance of the other Loans and
outstanding Letter of Credit Obligations; and (4) to all other Obligations,
including expenses of Lenders to the extent reimbursable under Section
11.3.
9
(b) During any time in which an Event of Default has occurred and is
continuing, Administrative Agent is authorized and may direct Revolving
Credit Agent to, and at Administrative Agent's sole election may instruct
Revolving Credit Agent to charge to the Revolving Loan balance on behalf of
Borrower and cause to be paid all Fees, expenses, Charges, costs (including
insurance premiums in accordance with Section 5.4(a)) and interest and
principal, other than principal of the Revolving Loan, owing by Borrower
under this Agreement or any of the other Loan Documents if and to the
extent Borrower fails to pay promptly any such amounts as and when due,
even if the amount of such charges would exceed Borrowing Availability at
such time after giving effect to such charges. At either Agent's option and
to the extent permitted by law, any charges so made in accordance with this
Section 1.11(b) shall constitute part of the Revolving Loan hereunder.
1.12 Loan Account and Accounting.
Administrative Agent shall maintain a loan account (the "Term Loan
Account") on its books to record: the Term Loan, all payments made by Borrower
with respect to the Term Loan and all other debits and credits as provided in
this Agreement with respect to the Term Loan or any other Obligations (other
than the information required to be recorded by the Revolving Credit Agent
pursuant to the next sentence) and the name of each Person that is a Term
Lender. Revolving Credit Agent shall maintain a loan account (the "Revolving
Loan Account" and together with the Term Loan Account, the "Loan Account") on
its books to record all Advances, all Letters of Credit, all Letter of Credit
Obligations, all participations in the Letter of Credit Obligations, the amount
of the reimbursement obligations of Borrower for each drawing made under a
Letter of Credit, all payments made by Borrower with respect to the Advances,
the Letters of Credit, the Letter of Credit Obligations, and all other debits
and credits as provided in this Agreement with respect to the Revolving Loans,
and the name of each Person that is a Revolving Lender or an L/C Issuer, as the
case may be. In addition, Borrower and Agents shall treat each Person whose name
is entered in the Loan Account as a Lender or as an L/C Issuer, as the case may
be, for all purposes hereunder. All entries in the Loan Account shall be made in
accordance with each Agent's customary accounting practices as in effect from
time to time. The balance in the Loan Account, as recorded on each Agents' most
recent printouts or other written statements, shall, absent manifest error, be
presumptive evidence of the amounts due and owing to such Agent and Lenders by
Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations. Each
Agent shall render to Borrower and Lenders a monthly accounting of transactions
with respect to the respective Loans maintained by them, setting forth the
balance and details of the Loan Account as to Borrower for the immediately
preceding month. Unless Borrower notifies the respective Agent in writing of any
objection to any such accounting (specifically describing the basis for such
objection), within 30 days after the date thereof, each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive
on Borrower in all respects as to all matters reflected therein. Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrower. Notwithstanding any provision herein contained to the contrary, any
Lender may elect (which election may be revoked) to dispense with the issuance
of Notes to that Lender and may rely on the Loan Account as evidence of the
amount of Obligations from time to time owing to it.
10
1.13 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each Agent, Lenders and their
respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and out-of-pocket
expenses (including reasonable attorneys' fees and disbursements and other
costs of investigation or defense, including those incurred upon any
appeal) that may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended, suspended
or terminated under this Agreement and the other Loan Documents and the
administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or
failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of
the Loan Documents (collectively, "Indemnified Liabilities"); provided,
that no such Credit Party shall be liable for any indemnification to an
Indemnified Person to the extent that any such suit, action, proceeding,
claim, damage, loss, liability or expense results from that Indemnified
Person's gross negligence or willful misconduct. NO INDEMNIFIED PERSON OR
PARTY HERETO SHALL, SUBJECT TO THE LAST SENTENCE OF THIS SECTION 1.13(a),
BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY
SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED
AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER
ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER. THE FOREGOING LIMITATION DOES NOT, IN ANY WAY,
RESTRICT OR LIMIT THE OBLIGATION OF THE CREDIT PARTIES TO THE INDEMNIFIED
PERSONS FOR INDEMNIFIED LIABILITIES.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that
repayment is made pursuant to any provision of this Agreement or any other
Loan Document or occurs as a result of acceleration, by operation of law or
otherwise); (ii) Borrower shall default in payment when due of the
principal amount of or interest on any LIBOR Loan; (iii) Borrower shall
refuse to accept any borrowing of, or shall request a termination of, any
borrowing of, conversion into or continuation of, LIBOR Loans after
Borrower has given notice requesting the same in accordance herewith; or
(iv) Borrower shall fail to make any prepayment of a LIBOR Loan after
11
Borrower has given a notice thereof in accordance herewith, then Borrower
shall indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing.
Such indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection,
each Lender shall be deemed to have actually funded its relevant LIBOR Loan
through the purchase of a deposit bearing interest at the LIBOR Rate in an
amount equal to the amount of that LIBOR Loan and having a maturity
comparable to the relevant LIBOR Period; provided, that each Lender may
fund each of its LIBOR Loans in any manner it sees fit, and the foregoing
assumption shall be utilized only for the calculation of amounts payable
under this subsection. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender
shall provide Borrower with its written calculation of all amounts payable
pursuant to this Section 1.13(b), and such calculation shall be binding on
the parties hereto unless Borrower shall object in writing within 10
Business Days of receipt thereof, specifying the basis for such objection
in detail.
1.14 Access.
Each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon one Business Day's prior notice as
frequently as Administrative Agent determines to be appropriate: (a) provide
Administrative Agent, and any of its officers, employees and agents access to
its properties, facilities, advisors and employees (including officers) of each
Credit Party and to the Collateral, (b) permit Administrative Agent, and any of
its officers, employees and agents, to inspect, audit and make extracts from any
Credit Party's books and records, and (c) permit Administrative Agent, and its
officers, employees and agents, to inspect, review, and evaluate the Collateral
of any Credit Party; provided that, so long as no Event of Default shall have
occurred and be continuing, Administrative Agent shall not exercise rights under
this Section 1.14 more often than two (2) times in any calendar year; provided,
further a Responsible Officer will be given notice and an opportunity to attend
(if a meeting) or otherwise participate in any communication with Borrower's
accountants. If a Default or Event of Default has occurred and is continuing or
if access is necessary to preserve or protect the Collateral as determined by
Administrative Agent in its reasonable discretion, each such Credit Party shall
provide such access to Administrative Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Borrower shall provide Administrative Agent with
access to their suppliers and customers. Each Credit Party shall make available
to Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records that Administrative
Agent may reasonably request. Each Credit Party shall deliver any document or
instrument necessary for Administrative Agent, as it may from time to time
reasonably request, to obtain records from any service bureau or other Person
that maintains records for such Credit Party, and shall maintain duplicate
records or supporting documentation on media, including computer tapes and discs
owned by such Credit Party.
1.15 Taxes.
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(a) Except as provided in this Section 1.15, any and all payments by
Borrower hereunder or under the Notes shall be made, in accordance with
this Section 1.15, free and clear of and without deduction for any and all
present or future Taxes. If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so
that after making all required deductions (including deductions applicable
to additional sums payable under this Section 1.15) Administrative Agent,
Revolving Credit Agent, Lenders or L/C Issuers, as applicable, receive an
amount equal to the sum they would have received had no such deductions
been made, (ii) Borrower shall make such deductions, and (iii) Borrower
shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law. Within 30 days after the date
of any payment of Taxes, Borrower shall furnish to Administrative Agent the
original or a certified copy of a receipt evidencing payment thereof.
Administrative Agent, Revolving Credit Agent, and Lenders shall not be
obligated to return or refund any amounts received pursuant to this
Section.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within 10 days of demand therefor, pay each Agent,
each Lender and each L/C Issuer, as the case may be, for the full amount of
Taxes (including any Taxes imposed by any jurisdiction on amounts payable
under this Section 1.15) paid by such Agent, such Lender or such L/C
Issuer, as appropriate, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted; provided that such Agent,
such Lender or such L/C Issuer, as the case may be, provides Borrower with
a written statement thereof setting forth in reasonable detail the basis
and calculation of such amount.
(c) Neither Borrower nor any Credit Party, pursuant to this Section
1.15, shall be required to pay any additional amount to, or to indemnify,
any Agent , Lender, or L/C Issuer, as the case may be, to the extent such
Agent, Lender, or L/C Issuer becomes subject to Taxes subsequent to the
Closing Date (or, if later, the date such Agent, Lender, or L/C Issuer
becomes a party to this Agreement) as a result of any change in the
residence, place of incorporation, principal place of business or the
branch or lending office of such Agent, Lender, or L/C Issuer, as the case
may be, or as a result of the sale by such Lender of participating
interests in such Lender's creditor position(s) hereunder.
(d) (i) Each Agent, each Lender and each L/C Issuer that is not a
United States person as defined in Section 7701(a)(30) of the IRC (each, a
"Foreign Lender") as to which payments to be made under this Agreement or
under the Notes are exempt from United States withholding tax under an
applicable statute or tax treaty shall provide, prior to or on the Closing
Date (or prior to or on the date such Foreign Lender becomes a party to
this Agreement), to Borrower and Administrative Agent a properly completed
and executed IRS Form W-8ECI or Form W-8BEN or other applicable form,
certificate or document prescribed by the IRS or the United States
certifying as to such Foreign Lender's entitlement to a full exemption from
United States withholding tax under an applicable statute or tax treaty
with respect to all payments to be made under this Agreement or under the
Notes or any other Loan Document (a "Certificate of Exemption"). Any
foreign Person that seeks to become a Lender, an L/C Issuer or an Agent
13
under this Agreement shall provide a Certificate of Exemption to Borrower
and Administrative Agent prior to becoming a Lender, an L/C Issuer or an
Agent hereunder. No foreign Person may become a Lender, an L/C Issuer or an
Agent hereunder if such Person fails to deliver a Certificate of Exemption
in advance of becoming a Lender, an L/C Issuer or an Agent, as applicable.
(ii) Each Agent, each Lender, each L/C Issuer that is a United States
person as defined in Section 7701(a)(30) of the IRC (each, a "U.S. Lender")
shall provide prior to or on the Closing Date (or on or prior to the date
it becomes a party to this Agreement) to Borrower and Administrative Agent
a properly completed and executed IRS Form W-9 (certifying that such U.S.
Lender is entitled to an exemption from United States backup withholding
tax) or any successor form. Solely for purposes of this Section 1.15, a
U.S. Lender shall not include a Lender, an L/C Issuer or an Agent that may
be treated as an exempt recipient based on the indicators described in
Treasury Regulation Section 1.6049-4(c)(1)(ii).
(e) Each Lender and each L/C Issuer agrees that, upon the occurrence
of any event giving rise to the operation of Section 1.15(a) or (b) with
respect to such Lender or L/C Issuer, as the case may be, if requested by a
Credit Party, it will use reasonable commercial efforts (subject to such
Lender's or L/C Issuer's overall internal policies of general application)
to designate another lending office for any Loans or Letter of Credit
Obligations affected by such event with the object of avoiding the
consequences of such event; provided that such designation is made on terms
that, in the reasonable judgment of such Lender or such L/C Issuer, as the
case may be, cause such Lender and its lending office(s) or such L/C Issuer
and its lending office(s), as the case may be, to suffer no economic, legal
or regulatory disadvantage, and provided, further that nothing in this
Section 1.15 shall affect or postpone any of the obligations of any Credit
Party or the rights of any Lender or any L/C Issuer pursuant to Section
1.15(a) or (b).
1.16 Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not
having the force of law), in each case, adopted after the Closing Date,
from any central bank or other Governmental Authority increases or would
have the effect of increasing the amount of capital, reserves or other
funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time upon demand by such Lender
(with a copy of such demand to Administrative Agent and Revolving Credit
Agent) pay to Administrative Agent (with respect to the Term Loan) or to
Revolving Credit Agent (with respect to the Revolving Loan), for the
account of such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to the amount of that reduction
and showing the basis of the computation thereof submitted by such Lender
to Borrower and to Agents shall, absent manifest error, be final,
conclusive and binding for all purposes.
14
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each
case adopted after the Closing Date, there shall be any increase in the
cost to any Lender of agreeing to make or making, funding or maintaining
any Loan, then Borrower shall from time to time, upon demand by such Lender
(with a copy of such demand to Administrative Agent), pay to Administrative
Agent (with respect to the Term Loan) or to Revolving Credit Agent (with
respect to the Revolving Loan) for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower
and to Agents by such Lender, shall be conclusive and binding on Borrower
for all purposes, absent manifest error. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances
referred to above which would result in any such increased cost, the
affected Lender shall, to the extent not inconsistent with such Lender's
internal policies of general application, use reasonable commercial efforts
to minimize costs and expenses incurred by it and payable to it by Borrower
pursuant to this Section 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in
the interpretation thereof) shall make it unlawful, or any central bank or
other Governmental Authority shall assert that it is unlawful, for any
Lender to agree to make or to make or to continue to fund or maintain any
LIBOR Loan, then, unless that Lender is able to make or to continue to fund
or to maintain such LIBOR Loan at another branch or office of that Lender
without, in that Lender's opinion, adversely affecting it or its Loans or
the income obtained therefrom, on notice thereof and demand therefor by
such Lender to Borrower through Administrative Agent, (i) the obligation of
such Lender to agree to make or to make or to continue to fund or maintain
LIBOR Loans shall terminate and (ii) Borrower shall forthwith prepay in
full all outstanding LIBOR Loans owing by Borrower to such Lender, together
with interest accrued thereon, unless Borrower within 5 Business Days after
the delivery of such notice and demand, converts all LIBOR Loans into Index
Rate Loans.
(d) Within 15 days after (i) receipt by Borrower of written notice and
demand from any Lender (an "Affected Lender") (A) for payment of additional
amounts or increased costs as provided in Sections 1.15(a), 1.15(b),
1.16(a) or 1.16(b), or (B) that such Lender shall cease to make LIBOR Loans
as provided in Section 1.16(c), or (ii) any Lender becomes a Non-Funding
Lender, then Borrower may, at its option, notify Agents and such Affected
Lender or Non-Funding Lender, as the case may be, of its intention to
replace such Lender. So long as no Default or Event of Default has occurred
and is continuing, Borrower, with the consent of Administrative Agent (and
if such Replacement Lender (as defined below) is to make Revolving Credit
Advances, with the consent of the Revolving Credit Agent), which consent
shall not be unreasonably withheld, may (x) obtain, at Borrower's expense,
a replacement Lender ("Replacement Lender") for the Affected Lender or
Non-Funding Lender, as the case may be, which Replacement Lender must be
reasonably satisfactory to Administrative Agent, or (y) terminate the
15
Commitment in respect of such Lender and repay all Obligations owing to
such Lender relating to the Loans. If Borrower obtains a Replacement Lender
within 90 days following notice of its intention to do so, the Affected
Lender or Non-Funding Lender, as the case may be, must sell and assign its
Loans and Commitments to such Replacement Lender for an amount equal to the
principal balance of all Loans held by such Lender and all accrued interest
and Fees with respect thereto through the date of such sale; provided that
Borrower shall have reimbursed such Lender for the additional amounts or
increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment. Notwithstanding the foregoing,
Borrower shall not have the right to obtain a Replacement Lender if the
Affected Lender rescinds its demand for increased costs or additional
amounts or continues to make LIBOR Loans or the Non-Funding Lender advances
funds in respect of its obligations hereunder within 15 days following its
receipt of Borrower's notice of intention to replace such Affected Lender
or Non-Funding Lender, as the case may be. Furthermore, if Borrower gives a
notice of intention to replace and does not so replace such Affected Lender
within 90 days thereafter, Borrower's rights to replace such Affected
Lender or Non-Funding Lender under this Section 1.16(d) shall terminate and
Borrower shall promptly pay all increased costs or additional amounts
demanded by such Affected Lender pursuant to Sections 1.15(a), 1.15(b),
1.16(a) and 1.16(b).
(e) With respect to any Lender's claim for compensation under this
Section 1.16, Borrower shall not be required to compensate such Lender for
any amounts incurred more than 180 days prior to the date that such Lender
obtains knowledge of the event that gives rise to the claim.
1.17 Single Loan.
All Loans to Borrower and all of the other Obligations of Borrower
arising under this Agreement and the other Loan Documents shall constitute one
general obligation of Borrower secured, until the Termination Date, by all of
the Collateral.
1.18 Joinder of Additional Credit Parties.
Any Person who is not a Credit Party hereunder at the Closing Date,
and is required to become a Credit Party hereunder, must (i) become a party to
this Agreement, (ii) assume all of the Obligations hereunder and under the other
Loan Documents and (iii) be bound by all the terms, conditions, representations
and warranties hereunder and under the other Loan Documents. Without limiting
the foregoing, such additional Credit Party promises to be jointly and severally
liable along with any other Credit Party for the guaranty and repayment of the
Obligations including the entire principal amount of the Revolving Loan and the
Term Loan when due under this Agreement. Further, Borrower and such additional
Credit Party shall, provide the following to Administrative Agent, each in form
and substance satisfactory to Administrative Agent in its sole discretion:
(a) A Joinder Agreement, together with all schedules and
documents requested therein, in the form set forth on
Exhibit 1.18 executed by such Credit Party;
16
(b) Updated Schedules to this Agreement and the Security
Agreement;
(c) Upon Administrative Agent's request, at Administrative
Agent's option and in its sole discretion, updated Schedules
and an amendment to the Darling Pledge Agreement together
with any original stock powers and Stock certificates of
such Credit Party, so that Administrative Agent shall, in
its reasonable discretion, have a lien and first priority
security interest on the Stock of such Credit Party;
(d) Upon Administrative Agent's request, at Administrative
Agent's option and in its sole discretion, a Pledge
Agreement executed by such Credit Party in form and content
acceptable to Administrative Agent, pursuant to which such
Credit Party pledges 100% of the outstanding Stock of its
Subsidiaries to Administrative Agent to secure the
Obligations, in form and content acceptable to
Administrative Agent, accompanied by share certificates
representing all of the outstanding Stock being pledged
pursuant to such Pledge Agreement and stock powers for such
share certificates executed in blank;
(e) A Guaranty executed by such Credit Party in form and content
acceptable to Administrative Agent, guaranteeing the
repayment by Borrower of the Loans and all other Obligations
of Borrower.
(f) Copies of the articles of incorporations, or otherwise
applicable organizational documents, of such additional
Credit Party;
(g) Good Standing certificates, domestic and foreign (if
applicable) of such additional Credit Party;
(h) Certificates of the Secretary of such additional Credit
Party setting forth (1) the names and true signatures of the
authorized officers of such additional Credit Party, (2) the
by-laws or otherwise applicable governing documents of such
additional Credit Party, (3) resolutions of such additional
Credit Party approving the transaction and the assumption
and guaranty of the Obligations, and (4) that the
representations and warranties set forth in Section 3 hereof
and the other Loan Documents are true and correct; and
(i) Such other certificates, documents, opinions, agreements and
information as any Agent or Lender may reasonably request.
1.19 Increase in Revolving Loan and Revolving Lender Commitments.
17
Borrower may request that the aggregate Revolving Loan Commitments be
increased by up to $12,500,000. Administrative Agent will use its reasonable
efforts to cause such increase by offering such increase first to Lenders under
this Agreement at such time, and then to Qualified Assignees deemed reasonably
satisfactory to Administrative Agent, in its discretion (each such Lender or
Qualified Assignee who shall agree to offer all or a portion of such increased
Revolving Loan Commitment shall hereinafter be referred to as an "Additional
Lender"). No Lender shall have any obligation to offer or provide any Revolving
Loan Commitment beyond such Lender's Revolving Loan Commitment set forth on
Annex J. Such increase in the Revolving Loan Commitment shall be subject to the
satisfaction of the following conditions in each case as of the date such
increase is to be effective:
(a) Each Agent and Lender shall have consented to such increase
in writing, and in form and content acceptable to
Administrative Agent;
(b) no Default or Event of Default shall have occured or be
continuing;
(c) such incremental increase shall only be made one time and
shall be in amount not to exceed $12,500,000;
(d) Administrative Agent shall have received an acknowledgement
agreement from any Additional Lender and Borrower in the
form of Exhibit 1.19;
(e) Borrower shall have executed and delivered new or revised
Revolving Notes to Lenders and any Additional Lender taking
into account the increased Revolving Loan Commitments and
the readjustment, if any, of Commitments resulting from the
addition of the increased Revolving Loan Commitment; and
(f) after giving effect to any such increase, the aggregate
Revolving Loan Commitment shall not exceed $55,000,000.
Borrower hereby acknowledges and agrees that, after the effective date of any
such increase, such increase in the Revolving Loan Commitment shall give rise to
a direct obligation of Borrower to the Additional Lenders and that each
Additional Lender shall be considered to be a "Revolving Lender" or "Lender"
hereunder. Borrower and Lenders authorize Administrative Agent to modify Annex J
at the time of any increase in the Revolving Loan Commitments to reflect such
increase and add Additional Lenders, if any.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan or incur any Letter of
Credit Obligations on the Closing Date, or to take, fulfill, or perform any
other action hereunder, until the following conditions have been (i) satisfied
or provided for in a manner satisfactory to Administrative Agent, (ii) waived in
writing by Administrative Agent and Lenders, or (iii) set forth as Post Closing
Requirements under and pursuant to Section 5.11:
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(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower, each
other Credit Party, Agents, and Lenders; and Administrative Agent shall
have received such documents, instruments, agreements and legal opinions as
Administrative Agent shall reasonably request in connection with the
transactions contemplated by this Agreement and the other Loan Documents,
as set forth in the Closing Checklist attached hereto as Annex D, each in
form and substance reasonably satisfactory to Administrative Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of Outstanding
L/Cs. (i) Administrative Agent shall have received a fully executed copy of
a pay-off letter reasonably satisfactory to Administrative Agent confirming
that all of the Prior Lender Obligations will be repaid in full from the
proceeds of the Term Loan and the initial Revolving Credit Advance and all
Liens upon any of the property of Borrower or any of its Subsidiaries in
favor of Prior Lender shall be terminated by Prior Lender immediately upon
such payment; and (ii) all letters of credit issued or guaranteed by Prior
Lender shall have been cash collateralized, supported by a guaranty of
Revolving Credit Agent or supported by a Letter of Credit issued pursuant
to Annex B, as mutually agreed upon by Agents, Borrower and Prior Lender.
(c) Approvals. Administrative Agent shall have received (i)
satisfactory evidence that the Credit Parties have obtained all required
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement
and the other Loan Documents and the consummation of the Related
Transactions or (ii) an officer's certificate in form and substance
reasonably satisfactory to Administrative Agent affirming that no such
consents or approvals are required.
(d) Opening Availability. Borrower, shall have Borrowing Availability,
after giving effect to the initial Revolving Credit Advance made to
Borrower, the incurrence of any initial Letter of Credit Obligations and
the consummation of the Related Transactions (on a pro forma basis, with
trade payables being paid currently, and expenses and liabilities being
paid in the ordinary course of business and without acceleration of sales)
of at least $20,000,000.
(e) Payment of Fees. Borrower shall have paid the Fees required to be
paid on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Administrative Agent for all fees, costs and expenses of closing
presented as of the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Administrative Agent in its reasonable
discretion.
(g) Total Indebtedness. On the Closing Date, after giving effect to
the initial Revolving Credit Advance and the Term Loan, the sum of
Borrower's and its Subsidiaries' (i) total Indebtedness, (ii) aggregate
gross minimum rental commitments under non-cancelable operating lease and
(iii) obligations in respect of off balance sheet financing as disclosed in
Borrower's most recent 10-K filing with the SEC, shall not exceed
$105,000,000.
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(h) Due Diligence. Administrative Agent shall have completed its
business, environmental and legal due diligence with results reasonably
satisfactory to Administrative Agent.
(i) Consummation of Related Transactions. Administrative Agent shall
have received fully executed copies of the other Related Transactions
Documents, each of which shall be in form and substance reasonably
satisfactory to Administrative Agent and its counsel. The Related
Transactions shall have been consummated in accordance with the terms of
the Related Transactions Documents.
2.2 Further Conditions to Each Loan.
Except as otherwise expressly provided herein, no Lender shall be
obligated to fund any Advance or incur any Letter of Credit Obligation, if, as
of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement and Administrative
Agent or Requisite Revolving Lenders have determined not to make such
Advance, convert or continue any Loan as LIBOR Loan or incur such Letter of
Credit Obligation as a result of the fact that such warranty or
representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Revolving
Lenders and Administrative Agent or Requisite Revolving Lenders have
determined not to make such Advance, convert or continue any Loan as a
LIBOR Loan or incur such Letter of Credit Obligation as a result of the
fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is continuing or
would result after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), and Administrative Agent or Requisite
Revolving Lenders shall have determined not to make any Advance, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation
as a result of that Default or Event of Default; or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the
aggregate Revolving Loan would exceed the lesser of (A) the Maximum Amount
or (B) the Revolving Compliance Maximum.
The request and acceptance by Borrower of the proceeds of any
Advance, or the incurrence of any Letter of Credit Obligations, shall be deemed
to constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Administrative
Agent's Liens, on behalf of itself and Lenders, pursuant to the Collateral
Documents.
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3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agents and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law.
(a) Each Credit Party (i) is a corporation, limited liability company
or limited partnership duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
organization set forth in Disclosure Schedule 3.1; (ii) is duly qualified
to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business
requires such qualification, except where the failure to be so qualified
would not reasonably be expected to have a Material Adverse Effect; (iii)
has the requisite power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the
property it operates under lease and to conduct its business as now,
heretofore and proposed to be conducted; (iv) subject to specific
representations regarding Environmental Laws, has all licenses, permits,
consents or approvals from or by, and has made all material filings with,
and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and
conduct, except where the failure to obtain or give the same would not
reasonably be expected to have a Material Adverse Effect; and (v) is in
compliance with its charter and bylaws or partnership or operating
agreement, as applicable.
(b) Subject to specific representations set forth herein regarding
ERISA, Environmental Laws, tax and other laws, each Credit Party is and
will remain in compliance with all applicable provisions of all laws and
regulations, including, without limitation, all applicable Bank Secrecy Act
("BSA") laws, regulations and government guidances on BSA compliance and on
the prevention and detection of money laundering violations, except where
the failure to comply would not reasonably be expected to have a Material
Adverse Effect. Without, in any way limiting the foregoing, each Credit
Party has taken and will take all necessary steps to ensure that no person
who owns a controlling interest in or otherwise controls such Credit Party
is or shall be (i) listed on the Specially Designated Nationals and Blocked
Person List maintained by the Office of Foreign Assets Control ("OFAC"),
Department of the Treasury, and/or any other similar lists maintained by
OFAC pursuant to any authorizing statute, Executive Order or regulation or
(ii) a person designated under Section 1(b), (c), or (d) of Executive Order
No. 13224 (September 23, 2001), any related enabling legislation or any
other similar Executive Order.
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3.2 Executive Offices, Collateral Locations Not Owned or Leased,
FEIN.
As of the Closing Date, the current location of each Credit Party's
chief executive office and the warehouses and premises which are not owned or
leased by the Credit Parties and at which any Collateral having a value in
excess of $50,000 is located are set forth in Disclosure Schedule 3.2. In
addition, Disclosure Schedule 3.2 lists the federal employer identification
number of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations.
The execution, delivery and performance by each Credit Party of the
Loan Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's power; (b) have been duly authorized by
all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Person's charter, bylaws or
partnership or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of
Administrative Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person, except those referred to in Section 2.1(c), all
of which will have been duly obtained, made or complied with prior to the
Closing Date, except, with respect to a violation, conflict, breach, termination
or default referred to in clause (d) and (e) above, which would not reasonably
be expected to have a Material Adverse Effect or with respect to a consent or
approval referred to in clause (g) above, the failure of which to obtain would
not reasonably be expected to have a Material Adverse Effect. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.
3.4 Financial Statements and Projections.
Except for the Projections, all Financial Statements concerning
Borrower and its respective Subsidiaries that are referred to below have been
prepared in accordance with GAAP consistently applied throughout the periods
covered (except as disclosed therein and except, with respect to unaudited
Financial Statements, for the absence of footnotes and normal year-end audit
adjustments) and present fairly in all material respects the financial position
of the Persons covered thereby as at the dates thereof and the results of their
operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule 3.4(a) have been delivered as of the date
hereof:
(i) The audited consolidated and consolidating balance sheets at
December 28, 2002 and the related statements of income and cash flows
of Borrower and its Subsidiaries for the Fiscal Years then ended,
certified by KPMG.
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(ii) The unaudited balance sheet(s) at January 3, 2004 and the
related statement(s) of income and cash flows of Borrower and its
Subsidiaries for the four Fiscal Quarters then ended, reviewed on a
preliminary basis by KPMG.
(iii) The unaudited balance sheet(s) at February 28, 2004 and the
related statement(s) of income and cash flows of Borrower and its
Subsidiaries for the portion of the Fiscal Quarter then ended.
(b) Pro Forma. The Pro Forma which has been delivered on or before the
date hereof and attached hereto as Disclosure Schedule 3.4(b) was prepared
by Borrower giving pro forma effect to the Related Transactions, was based
on the unaudited consolidated and consolidating balance sheets of Borrower
and its Subsidiaries dated January 3, 2004, and was prepared in accordance
with GAAP, with only such adjustments thereto as would be required in
accordance with GAAP.
(c) Projections. The Projections which have been delivered on or
before the date hereof and attached hereto as Disclosure Schedule 3.4(c)
have been prepared by Borrower in light of the past operations of their
businesses, but including future payments of known contingent liabilities,
and reflect projections for the five year period beginning on January 4,
2004 on a month-by-month basis for the first year and on a year-by-year
basis thereafter. The Projections are based upon estimates and assumptions
stated therein, all of which Borrower believes to be reasonable and fair in
light of current conditions and current facts known to Borrower and, as of
the Closing Date, reflect Borrower's good faith and reasonable estimates of
the future financial performance of Borrower and of the other information
projected therein for the period set forth therein. Such Projections are
not a guaranty of future performance and actual results may differ from
those set forth in such Projections.
3.5 Material Adverse Effect.
Between December 28, 2002 and the Closing Date no event has occurred,
that alone or together with other events, could reasonably be expected to have a
Material Adverse Effect.
3.6 Ownership of Property; Liens; Rolling Stock.
(a) As of the Closing Date, the real estate ("Real Estate") listed in
Disclosure Schedule 3.6 constitutes all of the real property owned, leased,
or subleased by any Credit Party. Except as disclosed on Disclosure
Schedule 3.6, each Credit Party owns good and marketable fee simple title
to all of its owned Real Estate, and valid and marketable leasehold
interests in all of its leased Real Estate, all as described on Disclosure
Schedule 3.6, and copies of all such leases or a summary of terms thereof
reasonably satisfactory to Administrative Agent have been delivered to
Administrative Agent. Each Credit Party also has good and marketable title
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to, or valid leasehold interests in, all of its personal property and
assets. As of the Closing Date, none of the properties and assets of any
Credit Party are subject to any Liens other than Permitted Encumbrances
that would, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, and there are no facts, circumstances or
conditions known to any Credit Party that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements,
bills of sale and other documents, and has duly effected all recordings,
filings and other actions necessary to establish, protect and perfect such
Credit Party's right, title and interest in and to all such Real Estate and
other properties and assets except to the extent that failure to obtain or
effect the same would not reasonable be expected to have a Material Adverse
Effect. Disclosure Schedule 3.6 also describes any purchase options, rights
of first refusal or other similar contractual rights pertaining to any Real
Estate. As of the Closing Date, no portion of any Credit Party's Real
Estate has suffered any material damage by fire or other casualty loss that
has not heretofore been repaired and restored in all material respects to
its original condition or otherwise remedied. As of the Closing Date, all
permits, other than Environmental Permits, required to have been issued or
appropriated to enable the Real Estate to be lawfully occupied and used for
all of the purposes for which it is currently occupied and used have been
lawfully issued and are in full force and effect, except to the extent that
failure to have the same issued or appropriated would not reasonably be
expected to have a Material Adverse Effect.
(b) All Rolling Stock and other Equipment owned by the Borrower which,
under applicable law (including, without limitation, any Motor Vehicle
Law), is required to be registered is properly registered or in the process
of being properly registered in the name of Borrower, and all Rolling Stock
and other Equipment owned by the Borrower, the ownership of which, under
applicable law (including, without limitation, any Motor Vehicle Law), is
evidenced by a certificate of title or ownership, is properly titled or is
in the process of being properly titled in the name of Borrower, except to
the extent that failure to have the same registered or titled would not
reasonably be expected to have a Material Adverse Effect. The Rolling Stock
listed on Disclosure Schedule 3.6 constitutes substantially all of the
Rolling Stock owned by the Borrower on the Closing Date and the Rolling
Stock not subject to a certificate of title or ownership under applicable
law (including, without limitation, any Motor Vehicle Law) is noted
therein.
3.7 Labor Matters.
As of the Closing Date (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply in all material respects with the Fair Labor Standards Act
and each other federal, state, local or foreign law applicable to such matters;
(c) all material payments due from any Credit Party for employee health and
welfare insurance have been paid or accrued as a liability on the books of such
Credit Party; (d) except as set forth in Disclosure Schedule 3.7, no Credit
Party is a party to or bound by any collective bargaining agreement, management
agreement, material consulting agreement, employment agreement, bonus,
restricted stock, stock option, or stock appreciation plan or agreement or any
24
similar plan, agreement or arrangement (and true and complete copies of any
agreements described on Disclosure Schedule 3.7 have been made available to
Administrative Agent); (e) there is no organizing activity involving any Credit
Party pending or, to any Credit Party's knowledge, threatened by any labor union
or group of employees; (f) there are no representation proceedings pending or,
to any Credit Party's knowledge, threatened with the National Labor Relations
Board, and no labor organization or group of employees of any Credit Party has
made a pending demand for recognition; and (g) except as set forth in Disclosure
Schedule 3.7, there are no material complaints or charges against any Credit
Party pending or, to the knowledge of any Credit Party, threatened to be filed
with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.
Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. As of
the Closing Date, all of the issued and outstanding Stock of each Subsidiary is
owned by each of the Stockholders and in the amounts set forth in Disclosure
Schedule 3.8. Except as set forth in Disclosure Schedule 3.8 and as is otherwise
publicly disclosed, as of the Closing Date, there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries.
3.9 Government Regulation.
No Credit Party is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Loans by Lenders to Borrower, the incurrence of the
Letter of Credit Obligations on behalf of Borrower, the application of the
proceeds thereof and repayment thereof and the consummation of the Related
Transactions will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.
3.10 Margin Regulations.
No Credit Party is engaged, nor will it engage, principally or as one
of its important activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin stock" as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as "Margin Stock"). No
Credit Party owns any Margin Stock, and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
25
purpose of reducing or retiring any Indebtedness that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
of the Loans or other extensions of credit under this Agreement to be considered
a "purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
3.11 Taxes.
All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other amounts
being contested in accordance with Section 5.2(b), and with respect to which the
failure to make such filing or payment would not reasonably be expected to have
a Material Adverse Effect. Proper and accurate amounts have been withheld by
each Credit Party from its respective employees for all periods in full and
complete compliance with all applicable federal, state, local and foreign laws
and such withholdings have been timely paid to the respective Governmental
Authorities. Disclosure Schedule 3.11 sets forth as of the Closing Date those
taxable years for which any Credit Party's tax returns are currently being
audited by the IRS or any other applicable Governmental Authority, and any
assessments or threatened assessments in connection with such audit, or
otherwise currently outstanding. Except as described in Disclosure Schedule
3.11, no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Credit Party's knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would reasonably be expected to have a Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule 3.12 lists (i) all ERISA Affiliates and (ii)
all Plans and separately identifies all Pension Plans, including Title IV
Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans (other than Multiemployer
Plans), together with a copy of the latest IRS/DOL 5500-series form for
each such Plan, have been delivered to Administrative Agent. Except with
respect to Multiemployer Plans, each Qualified Plan has been determined by
the IRS to qualify under Section 401 of the IRC, the trusts created
thereunder have been determined to be exempt from tax under the provisions
of Section 501 of the IRC, and nothing has occurred that would reasonably
be expected to cause the loss of such qualification or tax-exempt status.
Each Plan is in compliance with the applicable provisions of ERISA and the
IRC, including the timely filing of all reports required under the IRC or
ERISA, including the statement required by 29 CFR Section 2520.104-23,
except where such non-compliance would not reasonably be expected to have a
26
Material Adverse Effect. Neither any Credit Party nor ERISA Affiliate has
failed to make any contribution or pay any amount due as required by either
Section 412 of the IRC or Section 302 of ERISA or the terms of any such
Plan. Neither any Credit Party nor ERISA Affiliate has engaged in a
"prohibited transaction," as defined in Section 406 of ERISA and Section
4975 of the IRC, in connection with any Plan, that would subject any Credit
Party to a material tax on prohibited transactions imposed by Section
502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule 3.12: (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or
to the knowledge of any Credit Party, threatened claims (other than claims
for benefits in the normal course), sanctions, actions or lawsuits,
asserted or instituted against any Plan or any Person as fiduciary or
sponsor of any Plan; (iv) no Credit Party or ERISA Affiliate has incurred
any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan that has not been satisfied; (v) within the last five
years no Title IV Plan of any Credit Party or ERISA Affiliate has been
terminated, whether or not in a "standard termination" as that term is used
in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of any Credit
Party or any ERISA Affiliate (determined at any time within the last five
years) with Unfunded Pension Liabilities been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of
any Credit Party or ERISA Affiliate (determined at such time); (vi) except
in the case of any ESOP, Stock of all Credit Parties and their ERISA
Affiliates makes up, in the aggregate, no more than 10% of fair market
value of the assets of any Plan measured on the basis of fair market value
as of the latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from
an insurance company that is not rated AAA by the Standard & Poor's
Corporation or an equivalent rating by another nationally recognized rating
agency.
3.13 No Litigation.
No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of any Credit Party, threatened against any Credit
Party, before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (a) that challenges any Credit Party's
right or power to enter into or perform any of its obligations under the Loan
Documents to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) that has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
be reasonably be expected to have a Material Adverse Effect. Except as set forth
on Disclosure Schedule 3.13, as of the Closing Date there is no Litigation
pending or, to any Credit Party's knowledge, threatened, which could reasonably
be expected to result in liability in excess of $250,000 and which is not
covered by insurance, or injunctive relief against, or alleges criminal
misconduct which could reasonably be expected to result in a fine in excess of
$50,000 or which constitutes a felony, of any Credit Party.
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3.14 Brokers.
No broker or finder brought about the obtaining, making or closing of
the Loans or the Related Transactions, and no Credit Party or Affiliate thereof
has any obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property.
As of the Closing Date, each Credit Party owns or has rights to use
all Intellectual Property necessary to continue to conduct its business as now
or heretofore conducted by it or proposed to be conducted by it, and each
registered Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule 3.15.
Each Credit Party conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect. Except as set forth in Disclosure Schedule 3.15, no Credit Party is
aware of any infringement claim by any other Person with respect to any
Intellectual Property of such Credit Party.
3.16 Full Disclosure.
No information contained in this Agreement, any of the other Loan
Documents, any Projections or Financial Statements or other written reports from
time to time delivered hereunder or any written statement furnished by or on
behalf of any Credit Party to Administrative Agent or any Lender pursuant to the
terms of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. Assuming the filing of financing
statements in appropriate form and in the appropriate jurisdictions, the Liens
granted to Administrative Agent, on behalf of itself and Lenders, pursuant to
the Collateral Documents will at all times be fully perfected first priority
Liens in and to the Collateral for which perfection may be made by filing a
financing statement, subject, as to priority, only to Permitted Encumbrances.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17 and in public
filings made by the Credit Parties with the SEC, as of the Closing Date:
(i) the Credit Parties are and have been in compliance with all
Environmental Laws, except for such noncompliance that would not result in
Environmental Liabilities which could reasonably be expected to exceed
$500,000 individually or $3,000,000 in the aggregate, (ii) the Credit
Parties have obtained, maintain in good standing and are in compliance
with, all Environmental Permits required by Environmental Laws for the
operations of their respective businesses as presently conducted or as
proposed to be conducted, except where the failure to so obtain, maintain
or comply with such Environmental Permits would not result in Environmental
Liabilities that could reasonably be expected to exceed $500,000
individually or $3,000,000 in the aggregate, and all such Environmental
Permits are valid, uncontested and in good standing; (iii) no Credit Party
has knowledge of any facts, circumstances or conditions, including any
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Releases (other than Releases in licensed landfills made in accordance with
all Environmental Laws) of Hazardous Materials, that are likely to result
in any Environmental Liabilities of such Credit Party which could
reasonably be expected to exceed $500,000 individually or $3,000,000 in the
aggregate; (iv) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $500,000
individually or $3,000,000 in the aggregate, or injunctive relief against,
or that alleges criminal misconduct by, any Credit Party; (v) no notice has
been received by any Credit Party identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous
state statutes except for such notices or requests which would not result
in Environmental Liabilities which could reasonably be expected to exceed
$500,000 individually or $3,000,000 in the aggregate, and to the knowledge
of the Credit Parties, there are no material facts, circumstances or
conditions in existence that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous
state statutes; and (vi) the Credit Parties have made available to
Administrative Agent copies of all material and non-privileged existing
environmental reports, reviews and audits and all material and
non-privileged written information pertaining to actual or potential
Environmental Liabilities, in each case relating to any Credit Party that
are in the possession custody or control of a Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agents and
Lenders (i) are not now, and have not ever been, in control of any of the
Real Estate or any Credit Party's affairs, and (ii) do not have the
capacity through the provisions of the Loan Documents or otherwise to
influence any Credit Party's conduct with respect to the ownership,
operation or management of any of its Real Estate or compliance with
Environmental Laws or Environmental Permits.
3.18 Insurance.
Disclosure Schedule 3.18 lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the terms of each such policy.
3.19 Deposit and Disbursement Accounts.
Disclosure Schedule 3.19 lists, as of the Closing Date, all banks and
other financial institutions at which any Credit Party maintains deposit or
other accounts, including any Disbursement Accounts, and such Schedule correctly
identifies, as of the Closing Date, the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.
3.20 Customer and Trade Relations.
As of the Closing Date, there exists no actual or, to the knowledge
of any Credit Party, threatened termination or cancellation of, or any material
adverse modification or change in the business relationship of any Credit Party
with any customer whose purchases during the preceding 12 months caused them to
be ranked among the ten largest customers of such Credit Party, or the business
relationship of any Credit Party with any supplier material to its operations
that would prevent the Credit Parties from conducting their businesses in
substantially the same manner as conducted on the Closing Date.
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3.21 Agreements and Other Documents; Seller Obligations.
(a) As of the Closing Date, each Credit Party has made available to
Administrative Agent, its counsel or representative, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following
agreements or documents to which it is subject and each of which is listed
in Disclosure Schedule 3.21: forms of supply agreements and purchase
agreements not terminable by such Credit Party within 60 days following
written notice issued by such Credit Party and involving transactions in
excess of $1,000,000 per annum; leases of Equipment having a remaining term
of one year or longer and requiring aggregate rental and other payments in
excess of $250,000 per annum; licenses and permits held by the Credit
Parties, the absence of which could be reasonably likely to have a Material
Adverse Effect; instruments and documents evidencing any Indebtedness or
Guaranteed Indebtedness of such Credit Party and any Lien granted by such
Credit Party with respect thereto; and instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.
(b) Except as set forth and described in reasonable detail in
Disclosure Schedule 3.21, as of the Closing Date, Borrower is not subject
to any, and is not bound by any Seller Obligations.
3.22 Solvency.
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or incurred on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
incurred, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrower; (c) the Refinancing and the consummation of the other
Related Transactions; and (d) the payment and accrual of all transaction costs
in connection with the foregoing, each Credit Party is and will be Solvent.
3.23 Subordinated Debt.
As of the Closing Date, Borrower has delivered to Administrative
Agent a complete and correct copy of the Subordinated Notes (including all
schedules, exhibits, amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection therewith). The
subordination provisions of the Subordinated Notes are, to the best of
Borrower's knowledge, enforceable against the holders of the Subordinated Notes
by Administrative Agent and Lenders. All Obligations, including the Letter of
Credit Obligations, constitute senior Indebtedness and Senior Debt (as such term
is defined in the Subordinated Documents) entitled to the benefits of the
subordination provisions contained in the Subordinated Documents. In addition,
for purposes of clarifying defined terms under the Subordinated Documents, the
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parties hereto agree (i) the term "Indebtedness" (as defined in the Subordinated
Documents) shall be deemed to include all Obligations under this Agreement; (ii)
this Agreement constitutes and evidences a "Credit Facility" and the "Senior
Credit Agreement" (as each term is defined in the Subordinated Documents); and
(iii) the Indebtedness and Obligations outstanding under this Agreement
constitute "Senior Debt" (as defined in the Subordinated Documents). Borrower
acknowledges that Agents and each Lender are entering into this Agreement and
are extending the Commitments in reliance upon the subordination provisions of
the Subordinated Loan Documents and this Section 3.23.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. Each Credit Party executing this Agreement
hereby agrees that from and after the Closing Date and until the Termination
Date, it shall deliver to Administrative Agent or to Agents and Lenders, as
required, the Financial Statements, notices, Projections and other information
at the times, to the Persons and in the manner set forth in Annex E.
4.2 Communication with Accountants.
Each Credit Party executing this Agreement authorizes Administrative
Agent to communicate directly with its independent certified public accountants,
including KPMG, and authorizes and, at Administrative Agent's request, shall
instruct those accountants and advisors to communicate, disclose and make
available to Administrative Agent any and all Financial Statements and other
supporting financial documents, schedules and information relating to any Credit
Party (including copies of any issued management letters) with respect to the
business, financial condition and other affairs of any Credit Party; provided
that a Responsible Officer has been given prior notice and an opportunity to
attend (if a meeting) or otherwise participate in such communication.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business.
Each Credit Party shall: (a) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises (other than as permitted by Section 6.1), except
to the extent the failure to maintain the same would not reasonably be expected
to have a Material Adverse Effect; (b) at all times maintain, preserve and
protect all of its assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear and any
casualty or condemnation) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices; and (c) transact business only in such
corporate and trade names as are set forth in Disclosure Schedule 5.1, as the
same may be supplemented in accordance herewith.
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5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable
by it, including (i) Charges imposed upon it, its income and profits, or
any of its property (real, personal or mixed) and all Charges with respect
to tax, social security and unemployment withholding with respect to its
employees, (ii) lawful claims for labor, materials, supplies and services
or otherwise, and (iii) all storage or rental charges payable to
warehousemen or bailees, in each case, before any thereof shall become past
due, except to the extent that failure to pay or discharge the same would
not reasonably be expected to have a Material Adverse Effect.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that (i) adequate reserves with
respect to such contest are maintained on the books of such Credit Party,
in accordance with GAAP; (ii) no Lien shall be imposed to secure payment of
such Charges (other than payments to warehousemen and/or bailees) that is
superior to any of the Liens securing the Obligations and such contest is
maintained and prosecuted continuously and with diligence and operates to
suspend collection or enforcement of such Charges; (iii) no portion of the
Collateral exceeding $500,000 individually or in the aggregate becomes
subject to forfeiture or loss as a result of such contest; (iv) such Credit
Party shall promptly pay or discharge such contested Charges, Taxes or
claims and all additional charges, interest, penalties and expenses, if
any, and shall deliver to Administrative Agent evidence reasonably
acceptable to Administrative Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no
longer met; and (v) Administrative Agent has not advised Borrower in
writing that Administrative Agent reasonably believes that nonpayment or
nondischarge thereof could have or result in a Material Adverse Effect.
5.3 Books and Records.
Each Credit Party shall keep adequate books and records with respect
to its business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain
the policies of insurance in such amounts and covering such risks as are
customarily covered by Persons engaged in similar businesses and owning
similar properties in the same general areas where Borrower operates and
with insurers reasonably acceptable to Administrative Agent. Such policies
of insurance (or the loss payable and additional insured endorsements
delivered to Administrative Agent) shall contain provisions pursuant to
which the insurer agrees to provide 30 days prior written notice to
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Administrative Agent in the event of any non-renewal, cancellation or
amendment of any such insurance policy; provided that such policies may be
cancelable for non-payment of applicable premiums upon not less than 10
days prior written notice. If any Credit Party at any time or times
hereafter shall fail to obtain or maintain any of the policies of insurance
required above, or to pay all premiums relating thereto, Administrative
Agent may at any time or times thereafter obtain and maintain such policies
of insurance and pay such premiums and take any other action with respect
thereto that Administrative Agent deems advisable. Administrative Agent
shall have no obligation to obtain insurance for any Credit Party or pay
any premiums therefor. By doing so, Administrative Agent and Lenders shall
not be deemed to have waived any Default or Event of Default arising from
any Credit Party's failure to maintain such insurance or pay any premiums
therefor. All sums so disbursed, including reasonable attorneys' fees,
court costs and other charges related thereto, shall be payable on demand
by Borrower to Agents and shall be additional Obligations hereunder secured
by the Collateral.
(b) If reasonably requested by Administrative Agent, each Credit Party
shall deliver to Administrative Agent from time to time a report of a
reputable insurance broker, reasonably satisfactory to Administrative
Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Administrative Agent, in form
and substance reasonably satisfactory to Administrative Agent, endorsements
to (i) all "All Risk" and business interruption insurance naming
Administrative Agent, on behalf of itself and Lenders, as loss payee, and
(ii) all general liability and other liability policies naming
Administrative Agent, on behalf of itself and Lenders, as additional
insured. Each Credit Party irrevocably makes, constitutes and appoints
Administrative Agent (and all officers, employees or agents designated by
Administrative Agent), so long as any Event of Default has occurred and is
continuing, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims
under such "All Risk" policies of insurance, endorsing the name of such
Credit Party on any check or other item of payment for the proceeds of such
"All Risk" policies of insurance and for making all determinations and
decisions with respect to such "All Risk" policies of insurance.
Administrative Agent shall have no duty to exercise any rights or powers
granted to it pursuant to the foregoing power-of-attorney. Borrower shall
promptly notify Administrative Agent of any loss, damage, or destruction to
the Collateral in the amount of $250,000 or more, whether or not covered by
insurance.
(d) So long as no Event of Default has occurred and is continuing, the
Credit Parties may use any Net Cash Proceeds received as a result of any
casualty or condemnation in respect of any Credit Party's property to
replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction or to expand
existing Collateral. If the Net Cash Proceeds held by the Borrower at any
point in time exceed $2,000,000 in the aggregate, the Credit Parties shall
deliver and Administrative Agent shall receive and deposit the same in a
restricted access cash collateral account in which Administrative Agent
shall have a first priority perfected security interest. Thereafter,
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provided no Event of Default has occurred and is continuing, such funds
shall be made available to such Credit Party for payment in respect of work
actually performed or contracted to be performed to replace, repair,
restore or rebuild the Collateral in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction or to expand existing Collateral
upon delivery to Administrative Agent of receipts, bills, invoices or
documentation evidencing purchase orders, performance or completion of the
same. Such Net Cash Proceeds shall be disbursed by Administrative Agent
pursuant to a procedure reasonably acceptable to Administrative Agent. To
the extent not used to replace, repair, restore or rebuild the Collateral
or expand existing Collateral, such Net Cash Proceeds shall be applied in
accordance with Section 1.3(d). At any time after the occurrence and during
the continuance of an Event of Default, Administrative Agent may, at its
option, apply all or any portion of Net Cash Proceeds received as a result
of any casualty or condemnation in respect of any Credit Party's property
to the Obligations in accordance with Section 1.3(d).
5.5 Compliance with Laws.
Each Credit Party shall comply with all federal, state, local and
foreign laws and regulations applicable to it, including those relating to ERISA
and labor matters and Environmental Laws and Environmental Permits, except to
the extent that the failure to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
5.6 Supplemental Disclosure.
From time to time as may be reasonably requested by Administrative
Agent (which request will not be made more frequently than once each year absent
the occurrence and continuance of a Default or an Event of Default), the Credit
Parties shall supplement each Disclosure Schedule hereto, or any representation
herein or in any other Loan Document, with respect to any matter hereafter
arising that, if existing or occurring at the date of this Agreement, would have
been required to be set forth or described in such Disclosure Schedule or as an
exception to such representation or that is necessary to correct any information
in such Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such
Disclosure Schedule shall be appropriately marked to show the changes made
therein); provided that (a) no such supplement to any such Disclosure Schedule
or representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Administrative Agent and Requisite Lenders in writing, and (b) no supplement
shall be required or permitted as to representations and warranties that relate
solely to the Closing Date.
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5.7 Intellectual Property.
Each Credit Party will conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person if such infringement or interference would reasonably be expected to have
a Material Adverse Effect.
5.8 Environmental Matters.
Each Credit Party shall and shall cause each Person within its
control to: (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are reasonably appropriate or necessary to maintain the
value and marketability of the Real Estate in its present condition and use or
to otherwise comply with Environmental Laws and Environmental Permits pertaining
to the presence, generation, treatment, storage, use, disposal, transportation
or Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Administrative Agent promptly after such
Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of $500,000 individually or $3,000,000 in the aggregate; and (d)
promptly forward to Administrative Agent a copy of any order, notice, request
for information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $500,000
individually and $3,000,000 in the aggregate, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter. If Administrative Agent at any time has a reasonable basis to believe
that there may be a violation of any Environmental Laws or Environmental Permits
by any Credit Party or any Environmental Liability arising thereunder, or a
Release of Hazardous Materials on, at, in, under, above, to, from or about any
of its Real Estate, that, in each case, could reasonably be expected to have a
Material Adverse Effect, then each Credit Party shall, upon Administrative
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as Administrative Agent may from
time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Administrative Agent and
shall be in form and substance reasonably acceptable to Administrative Agent,
and (ii) permit Administrative Agent or its representatives to have access to
all Real Estate for the purpose of conducting such environmental audits and
testing as Administrative Agent deems appropriate, including subsurface sampling
of soil and groundwater. Borrower shall reimburse Administrative Agent for the
costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters
and Real Estate Purchases.
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Each Credit Party shall use commercially reasonable efforts to obtain
a landlord's agreement, mortgagee agreement or bailee letter, as applicable,
from the lessor of each leased property, mortgagee of owned property or bailee
with respect to any warehouse, processor or converter facility or other location
where Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be reasonably satisfactory in form and substance to Administrative Agent. Each
Credit Party shall timely and fully pay and perform its obligations under all
leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located. To the extent otherwise
permitted hereunder, if any Credit Party proposes to acquire a fee ownership
interest in Real Estate after the Closing Date, at the time of such acquisition,
it shall provide to Administrative Agent, in Administrative Agent's discretion,
a mortgage or deed of trust granting Administrative Agent a first priority Lien,
subject to Permitted Encumbrances, on such Real Estate, or Negative Pledge to be
recorded in the applicable land records where the Real Estate is located,
together with environmental audits, mortgage title insurance commitment, real
property survey, local counsel opinion(s), and, if required by Administrative
Agent in its reasonable discretion, within thirty days of the acquisition
thereof, supplemental casualty insurance and flood insurance, and such other
documents, instruments or agreements reasonably requested by Administrative
Agent, in each case, in form and substance reasonably satisfactory to
Administrative Agent. Without in any way limiting the provisions of this Section
5.9, Section 5.11 or any other provision of any Loan Document, Borrower shall
(a) pursuant to the terms of the Post Closing Requirements execute and deliver
the Initial Mortgages with respect to the Real Estate described on Disclosure
Schedule 5.9 and take all steps reasonably necessary to provide Administrative
Agent down dated title certificates or other evidence of the current status of
title reasonably acceptable to Administrative Agent, flood insurance
certificates (to the extent reasonably deemed necessary by Administrative Agent)
with respect to such Real Estate, and (b) execute and deliver, promptly upon
Administrative Agent's request, additional Mortgages covering all or any
requested portion of the Real Estate owned in fee by any Credit Party (other
that the Real Estate encumbered by the Initial Mortgages) and take all steps
reasonably necessary to provide Administrative Agent, in Administrative Agent's
reasonable discretion, title policies, surveys, local counsel opinions and flood
insurance certificates with respect to such Mortgages or the Real Estate
encumbered thereby. Borrower shall cooperate with Administrative Agent and shall
take all steps reasonably requested by Administrative Agent to record
counterparts of the Mortgages in all places necessary or desirable, in the
reasonable judgment of Administrative Agent, to create a valid and enforceable
first priority lien (subject to Permitted Encumbrances) on each parcel of Real
Estate, from time to time encumbered or to be encumbered by a Mortgage (such
Real Estate is collectively herein referred to as the "Mortgaged Properties") in
favor of Administrative Agent for the benefit of itself and Lenders (or in favor
of such other trustee as may be required or desired under local law).
5.10 Rolling Stock.
Each Credit Party shall cause all Rolling Stock, now owned or
hereafter acquired by such Credit Party, which, under applicable law, is
required to be registered, to be properly registered (including, without
limitation, the payment of all necessary taxes and receipt of any applicable
permits) in the name of such Credit Party, and cause all Rolling Stock, now
owned or hereafter acquired by such Credit Party, the ownership of which, under
36
applicable law (including, without limitation, any Motor Vehicle Law), is
evidenced by a certificate of title or ownership, to be properly titled in the
name of such Credit Party, with the Administrative Agent's Lien properly noted
thereon, except, in each case, to the extent the failure of which to properly
register or title would not reasonably be expected to have a Material Adverse
Effect.
5.11 Post Closing and Delayed Delivery Requirements.
Borrower agrees that it will perform and satisfy to the reasonable
satisfaction of the Administrative Agent and its counsel each of the
requirements (the "Post Closing Requirements") listed on Disclosure Schedule
5.11 attached hereto on or before the date listed in such schedule by which each
such Post Closing Requirement is to be performed (unless otherwise agreed or
waived by Administrative Agent). Borrower further agrees that the Post Closing
Requirements expressly include the obligation of Borrower to, as applicable,
cooperate fully and promptly with Administrative Agent with respect to the
completion of each of the Post Closing Requirements and the provision of all
information, documents, matters and things as Administrative Agent, acting
reasonably, may deem necessary or advisable (a) to determine what actions must
be taken to fulfill each of the Post Closing Requirements, (b) to complete and
fulfill each of the Post Closing Requirements, and (c) to confirm and assess
whether all actions necessary to fulfill each of the Post Closing Requirements
have been taken. If and to the extent that any condition to making the Loans,
funding the initial Advance, the incurrence of Letter of Credit Obligations or
the issuance of Letters of Credit is included as a Post Closing Requirement,
such condition shall not be deemed waived or abandoned by the Agents and the
Lenders, but the required performance or occurrence of the same shall be
governed by the terms of this Section 5.11.
5.12 Further Assurances.
Each Credit Party executing this Agreement agrees that it shall and
shall cause each other Credit Party to, at such Credit Party's expense and upon
reasonable request of Administrative Agent, duly execute and deliver, or cause
to be duly executed and delivered, to Administrative Agent such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Administrative Agent to carry out more
effectively the provisions and purposes of this Agreement or any other Loan
Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc.
No Credit Party shall directly or indirectly, by operation of law or
otherwise, (a) form or acquire any Subsidiary, except that a Credit Party may
form a Subsidiary provided such Subsidiary is formed and registered as a
domestic entity under the laws of a state of the United States of America and
becomes a Credit Party, or (b) merge with, consolidate with, acquire all or
37
substantially all of the assets, any operating division or group of operating
assets (including without limitation the acquisition of customer lists or
routes) or Stock of, or otherwise combine with or acquire, any Person, except
that (x) any Subsidiary may merge or consolidate with and into any Credit Party
if such Credit Party is the surviving entity, and (y) any Subsidiary may merge
or consolidate with and into another Person in a transaction the purpose of
which is to dispose of assets permitted by Section 6.8. Notwithstanding the
foregoing, Borrower may acquire all or substantially all of the assets, or
operating division or group of operating assets (including, customers lists or
routes) or Stock of any Person (the "Target") (in each case, a "Permitted
Acquisition") subject (except as expressly permitted by Section 6.8(k)) to the
satisfaction, in form and content acceptable to Administrative Agent and in
Administrative Agent's reasonable discretion, of each of the following
conditions:
(i) Administrative Agent shall receive at least 10 Business Days'
prior written notice of such proposed Permitted Acquisition, which
notice shall include a reasonably detailed description of such
proposed Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve assets located
in the United States and comprising a business, or those assets of a
business, of the type engaged in by Borrower as of the Closing Date,
and any Subsidiary formed or acquired in connection with any Permitted
Acquisition must be incorporated or organized in the United States;
(iii) concurrently with the delivery of notice of such proposed
Permitted Acquisition delivered to Administrative Agent pursuant to
Section 6.1(i) above, Borrower shall deliver to Administrative Agent
in form and content reasonably satisfactory to Administrative Agent:
(a) all detailed due diligence materials, transaction
descriptions, environmental information and reports and other
reports in connection with such Permitted Acquisition which have
been or will be delivered to the board of directors of Borrower
in anticipation of obtaining approval by such board of directors
of such Permitted Acquisition, and following the date of delivery
of such initial information, Borrower shall deliver to
Administrative Agent any additional or supplemental information
delivered to its or any Borrower's board of directors in
connection with such proposed Permitted Acquisition, not later
than five (5) days after such delivery;
(b) a pro forma consolidated balance sheet, income statement
and cash flow statement of Borrower and its Subsidiaries (the
"Acquisition Pro Forma"), based on recent Financial Statements,
which shall be complete and shall fairly present in all material
respects the assets, liabilities, financial condition and results
of operations of Borrower and its Subsidiaries in accordance with
GAAP consistently applied, but taking into account such Permitted
Acquisition and the funding of all Loans in connection therewith,
and such Acquisition Pro Forma shall reflect that on a pro forma
38
basis, no Event of Default has occurred and is continuing or
would result after giving effect to such Permitted Acquisition
and Borrower will be in compliance with the financial covenants
set forth in Annex G for the four quarter period reflected in the
Compliance Certificate most recently delivered to Administrative
Agent pursuant to Annex E prior to the consummation of such
Permitted Acquisition (after giving effect to such Permitted
Acquisition and all Loans funded in connection therewith as if
made on the first day of such period);
(c) updated versions of the most recently delivered
Projections covering the 1-year period commencing on the date of
such Permitted Acquisition and otherwise prepared in accordance
with the Projections (the "Acquisition Projections") (it being
recognized by Administrative Agent and Lenders that such
Acquisition Projections are not to be viewed as facts and that
actual results may differ from projected results) and based upon
historical financial data of a recent date reasonably
satisfactory to Administrative Agent, taking into account such
Permitted Acquisition and showing Borrower to be in compliance
with the Financial Covenants for the one-year period thereafter;
and
(d) a certificate of the chief financial officer of Borrower
to the effect that: (w) Borrower will be Solvent upon the
consummation of the Permitted Acquisition; (x) the Acquisition
Pro Forma has been prepared in accordance with GAAP and in good
faith based on reasonable assumptions as of the date thereof
after giving effect to the Permitted Acquisition; (y) the
Acquisition Projections have been prepared in good faith based on
reasonable assumptions as of the date thereof, are reasonable
estimates of the future financial performance of Borrower
subsequent to the date thereof based upon the historical
performance of Borrower and the Target and show that Borrower
shall continue to be in compliance with the Financial Covenants
for the one-year period thereafter; and (z) Borrower has
completed its due diligence investigation with respect to the
Target and such Permitted Acquisition, which investigation was
conducted in a manner similar to that which would have been
conducted by a prudent purchaser of a comparable business and the
results of which investigation were delivered to Administrative
Agent and Lenders;
(iv) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's and Borrower's board of directors;
(v) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed
or otherwise be reflected on a consolidated balance sheet of Borrower
and Target after giving effect to such Permitted Acquisition, except
(A) Loans made hereunder, (B) Indebtedness permitted under Section 6.3
and (C) ordinary course trade payables and accrued expenses;
39
(vi) the sum of all Acquisition/Route Swap Costs shall not exceed
$5,000,000 during any Fiscal year; provided however, the sum of the
amounts payable in connection with all Permitted Acquisitions in any
Fiscal Year will be increased in any period by the positive amount
equal to the lesser of (A) $1,000,000, and (B) the amount (if any),
equal to the difference obtained by taking the Permitted Acquisitions
limit specified above for the immediately prior Fiscal Year minus the
actual amount of sums payable in connection with Permitted
Acquisitions during such prior period (the "Permitted Acquisition
Carry Over Amount"), and for purposes of measuring compliance
herewith, the Permitted Acquisition Carry Over Amount shall be deemed
to be the last amount spent on Permitted Acquisitions in that
succeeding year.
(vii) the Target shall become a Credit Party hereunder pursuant
to Section 1.18 and (A) will grant Administrative Agent for itself and
the Lenders, a first priority perfected Lien (subject to Permitted
Encumbrances) in all assets acquired pursuant thereto or in the assets
and Stock of Target, (B) provide Administrative Agent a Guaranty in
favor of Administrative Agent, for itself and the ratable benefit of
the Lenders, guaranteeing the Obligations, and (C) deliver to
Administrative Agent a Collateral Assignment of Representations,
Warranties, Covenants, Indentures and Rights, in form and content
acceptable to Administrative Agent, in connection with all assets
acquired pursuant thereto;
(viii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances), in material compliance with all Environmental Laws and
Environmental Permits required by such Environmental Laws;
(ix) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default has occurred and is
continuing;
(x) Borrower shall deliver such other due diligence materials,
transaction descriptions, environmental information, audits and
reports and such other reports in connection with such Permitted
Acquisition which shall be reasonably requested by Administrative
Agent, and which shall be in form and content satisfactory to
Administrative Agent in its reasonable discretion.
6.2 Investments; Loans and Advances.
Except as otherwise expressly permitted by this Section 6, no Credit Party shall
make or permit to exist any investment in, or make, accrue or permit to exist
loans or advances of money to, any Person, through the direct or indirect
lending of money, holding of securities or otherwise, except: (a) Borrower may
hold investments comprised of notes payable, or Stock or other securities issued
by Account Debtors to Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
40
so long as the aggregate amount of such Accounts so settled by Borrower does not
exceed $1,000,000; (b) each Credit Party may maintain its existing investments
in its Subsidiaries as of the Closing Date; (c) so long as no Event of Default
has occurred and is continuing Borrower may make investments in cash and Cash
Equivalents, subject to Control Letters in favor of Administrative Agent for the
benefit of the Lenders or otherwise subject to a perfected security interest in
favor of Administrative Agent for the benefit of Lenders; (d) any investment in
Borrower or in any Credit Party, provided, that no investment shall be made by
any Credit Party in a Subsidiary that becomes a Credit Party pursuant to Section
6.1(a), without the prior written consent of Administrative Agent, which such
consent shall not be unreasonably withheld; (e) loans or advances to officers,
directors and employees of Credit Parties permitted by Section 6.4; (f)
investments consisting of extensions of credit to customers on customary terms
in the ordinary course of business; (g) investments in the ordinary course of
business consisting of (i) endorsements for collection or deposit and (ii)
customary trade arrangements with customers consistent with past practice; (h)
investments, loans and advances arising out of any of the transactions otherwise
permitted under Sections 6.1, 6.3, 6.8 and 6.14, (i) advances made by Borrower
to fund pension and severance obligations and other related costs in connection
with the dissolution and termination of business operations of any Subsidiary in
existence as of the Closing Date, in an amount not in excess of $750,000, and
(j) other investments not of the kind set forth above not in excess of
$1,000,000 in the aggregate.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension
fund and other employee benefit plan obligations and liabilities to the
extent they are permitted to remain unfunded under applicable law, (iv)
existing Indebtedness described in Disclosure Schedule 6.3 and refinancings
thereof or amendments or modifications thereto that do not have the effect
of increasing the principal amount thereof or changing the amortization
thereof (other than to extend the same) and that are otherwise on terms and
conditions no less favorable to any Credit Party, Agents or any Lender, as
reasonably determined by Administrative Agent, than the terms of the
Indebtedness being refinanced, amended or modified, (v) Indebtedness in
respect of Hedging Agreements permitted under Section 6.17, (vi) the
Subordinated Debt as the same exists on the Closing Date, and as the same
may be modified, from time to time in a manner not prohibited by Section
6.19, (vii) Indebtedness consisting of intercompany loans and advances made
by a Credit Party to any other Credit Party; provided, that: (A) each
Credit Party shall record all intercompany transactions on its books and
records in a manner reasonably satisfactory to Administrative Agent; (B)
the obligations of Borrower and/or any Credit Party under any such
intercompany transactions shall be subordinated to the Obligations of
Borrower hereunder in a manner reasonably satisfactory to Administrative
Agent; and (C) at the time any such intercompany loan or advance is made by
Borrower to any other Credit Party and after giving effect thereto,
Borrower and each such other Credit Party shall be Solvent; (viii)
Indebtedness arising under any performance, appeal and surety bonds, and
other similar obligations, in each case entered into in the ordinary course
41
of business; (ix) to the extent constituting Indebtedness, contingent
obligations arising under indemnity agreements to title insurers to cause
such title insurers to issue title insurance policies obtained in the
ordinary course of business; (x) to the extent constituting Indebtedness,
contingent liabilities arising out of endorsements of checks and other
negotiable instruments for deposit or collection in the ordinary course of
business; (xi) guarantees of Indebtedness permitted to be incurred by this
Section 6.3, including any extensions, renewals or replacements of such
guarantees; and (xii) Guaranteed Indebtedness permitted by Section 6.6;
(xiii) other Indebtedness not of the kind set forth above not in excess of
$1,000,000 in the aggregate.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any,
interest or other amount payable in respect of any Indebtedness, other than
(i) the Obligations; (ii) Indebtedness secured by a Permitted Encumbrance
if the asset securing such Indebtedness has been sold or otherwise disposed
of in accordance with Sections 6.8(b) or (c); (iii) Indebtedness permitted
by Section 6.3(a)(iv) upon any refinancing thereof in accordance with
Section 6.3(a)(iv); (iv) as otherwise permitted in Section 6.14; (v) any
Earn Out Obligation.
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any transaction
with any other Credit Party or any Affiliate thereof except (i) in the
ordinary course of and pursuant to the reasonable requirements of such
Credit Party's business and upon fair and reasonable terms that are no less
favorable to such Credit Party than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of such Credit Party;
(ii) transactions between Credit Parties; (iii) the payment of reasonable
and customary fees and expenses payable to directors of Borrower and the
other Credit Parties and the provision of customary indemnification to
directors and officers of Borrower and the other Credit Parties; (iv) sales
or issuances of capital stock or other equity interests to Affiliates of
Borrower which are otherwise permitted under this Agreement; (v)
investments that are otherwise permitted under Section 6.2; (vi) any tax
sharing agreement or arrangement or any payments pursuant thereto among the
Credit Parties, whereby Borrower or another Credit Party is required or
permitted to file a consolidated, combined or unitary tax return, and (vii)
Restricted Payments to the extent permitted by Section 6.14. All such
transactions existing as of the date hereof are described in Disclosure
Schedule 6.4(a).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with
past practices for travel and entertainment expenses, relocation costs and
similar purposes and stock option financing up to a maximum of $100,000 to
any employee and up to a maximum of $1,000,000 in the aggregate at any one
time outstanding.
6.5 Capital Structure and Business.
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No Credit Party shall (a) make any changes in any of its business
objectives, purposes or operations that could in any way adversely affect the
repayment of the Loans or any of the other Obligations or could reasonably be
expected to have or result in a Material Adverse Effect, (b) make any change in
its capital structure as described in Disclosure Schedule 3.8, including the
issuance or sale of any shares of Stock, warrants or other securities
convertible into Stock or any revision of the terms of its outstanding Stock,
except to the extent permitted by Section 6.8 or in connection with Permitted
Equity Issuances; or (c) amend its charter or bylaws in a manner that would
adversely affect Agents or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto.
6.6 Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except (a) by endorsement of instruments or items of
payment for deposit to the general account of any Credit Party, (b) for
Guaranteed Indebtedness incurred for the benefit of any other Credit Party if
the primary obligation is expressly permitted by this Agreement other than
Indebtedness, if any, of a Target existing at the time such Target is acquired,
(c) indemnities in favor of Persons issuing title insurance policies insuring
the title to any property to induce the issuance thereof; (d) surety bonds
issued in respect of the type of obligations permitted under Section 6.7(f); and
(e) guarantees set forth on Disclosure Schedule 6.6 and extensions, renewals and
replacements thereof.
6.7 Liens.
No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for the following
(collectively, the "Permitted Encumbrances"): (a) Liens for taxes or assessments
or other governmental Charges not yet due and payable or which are being
contested in accordance with Section 5.2(b); (b) pledges or deposits of money
securing statutory obligations under workmen's compensation, unemployment
insurance, social security or public liability laws or similar legislation
(excluding Liens under ERISA); (c) pledges or deposits of money securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Credit Party is a party as lessee made in the ordinary course of
business; (d) inchoate and unperfected workers', mechanics' or similar liens
arising in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Estate; (e) carriers', warehousemen's,
suppliers' or other similar possessory liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $1,000,000 at any time, so long as such Liens attach only to
Inventory; (f) deposits securing, or in lieu of, surety, appeal or customs bonds
in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(j); (h)
zoning restrictions, easements, licenses, or other restrictions on the use of
any Real Estate or other minor irregularities in title (including leasehold
title) thereto, so long as the same do not materially impair the use, value, or
marketability of such Real Estate; (i) presently existing or hereafter created
Liens in favor of Administrative Agent, on behalf of Lenders; (j) Liens in
existence on the date hereof and summarized on Disclosure Schedule 6.7 securing
the Indebtedness described on Disclosure Schedule 6.3 and permitted
43
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; (k)
Liens created after the date hereof by conditional sale or other title retention
agreements (including Capital Leases) or in connection with purchase money
Indebtedness with respect to Equipment and Fixtures acquired by any Credit Party
in the ordinary course of business, involving the incurrence of an aggregate
amount of purchase money Indebtedness and Capital Lease Obligations of not more
than $2,500,000 outstanding at any one time for all such Liens (provided, that
such Liens attach only to the assets acquired and such Indebtedness is incurred
within 20 days following such purchase and does not exceed 100% of the purchase
price of the subject assets); (l) deposits made in the ordinary course of
business to secure liabilities for premiums to insurance carriers or liabilities
in respect of indemnification obligations under leases or other contractual
arrangements; (m) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted or not prohibited by
this Agreement; (n) Liens (i) of a collection bank arising under Section 4-210
of the Code on items in the course of collection and (ii) in favor of a banking
institution arising as a matter of law encumbering deposits (including the right
of set-off) and which are within the general parameters customary in the banking
industry, (o) statutory and common law landlords' liens under leases to which
any Credit Party is a party; (p) leases, subleases, licenses or sublicenses
granted in the ordinary course of business and not interfering in any material
respect with the business of any Credit Parties, and not otherwise prohibited by
the terms of this Agreement; and (q) Liens encumbering reasonable customary
initial deposits and margin deposits and similar Liens attaching to commodity
trading accounts or other brokerage accounts incurred in the ordinary course of
business and not for speculative purposes. In addition, no Credit Party shall
become a party to any agreement, note, indenture or instrument, or take any
other action, that would prohibit the creation of a Lien on any of its
properties or other assets in favor of Administrative Agent, on behalf of itself
and Lenders, as additional collateral for the Obligations, except operating
leases, Capital Leases or Licenses which prohibit Liens upon the assets that are
subject thereto.
6.8 Sale of Stock and Assets.
No Credit Party shall sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of its Accounts, other than (a) the sale of Inventory in the ordinary course of
business; (b) the sale, transfer, conveyance or other disposition by a Credit
Party of Equipment, Fixtures or Real Estate that are obsolete or no longer used
or useful in such Credit Party's business and having a market value, in
Administrative Agent's reasonable discretion, not exceeding $1,000,000 in any
single transaction or $2,000,000 in the aggregate in any Fiscal Year; (c) other
Equipment (not including Equipment which constitutes Rolling Stock) and Fixtures
having a market value, in Administrative Agent's reasonable discretion, not
exceeding $1,000,000 in any single transaction or $2,000,000 in the aggregate in
any Fiscal Year; (d) Rolling Stock having a market value not exceeding $75,000
in any single transaction or $500,000 in the aggregate in any Fiscal Year; (e)
sales or other dispositions of cash or Cash Equivalents; (f) sales, leases or
other dispositions of property between or among the Credit Parties to the extent
permitted by Section 6.4 or in connection with the formation of a Subsidiary
that becomes a Credit Party pursuant to Section 6.1(a), provided such transferor
44
obtains the prior written consent of Administrative Agent, which consent shall
not be unreasonably witheld; (g) transfers of property resulting from casualty
or condemnation proceedings; (h) sales of any assets in connection with any
sale-leaseback, synthetic lease or similar transaction, in each case to the
extent such transaction is permitted by Section 6.12; (i) the issuance of
capital stock or other equity interests by a Credit Party to another Credit
Party; (j) investments or Restricted Payments that are otherwise permitted under
Section 6.2 or 6.14, respectively; (k) route sales to third parties of lists of
customers who provide raw materials to the Credit Parties and associated
vehicles and containers utilized to collect and store such materials made in
connection with corresponding purchases from the applicable route sellers (the
transaction taken as a whole, a "Route Swap"); provided, that the net effect of
such Route Swaps shall not result in cash payments by the Credit Parties in
excess of $500,000 per Route Swap and $1,000,000 in the aggregate or cause
Acquisition/Route Swap Costs to in excess of the amounts permitted in Section
6.1(vi) in any Fiscal Year; and (l) sales or dispositions permitted under
Disclosure Schedule 5.11. With respect to any disposition of assets or other
properties permitted pursuant to the clauses above, subject to Section 1.3(b),
Agents and the Lenders agree that Administrative Agent may, without the consent
of the Lenders, release its Lien on such assets or other properties in order to
permit the applicable Credit Party to effect such disposition and Administrative
Agent shall execute and deliver to Borrower, at Borrower's expense, appropriate
UCC-3 termination statements and other releases as reasonably requested by
Borrower.
6.9 ERISA.
No Credit Party shall, or shall cause or permit any ERISA Affiliate
to, cause or permit to occur an event that could reasonably be expected to
result in the imposition of a Lien under Section 412 of the IRC or Section 302
or 4068 of ERISA or cause or permit to occur an ERISA Event to the extent such
ERISA Event could reasonably be expected to have a Material Adverse Effect.
6.10 Financial Covenants.
Borrower shall not breach or fail to comply with any of the Financial
Covenants.
6.11 Hazardous Materials.
No Credit Party shall cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value or marketability of any of the Real
Estate or any of the Collateral, other than such violations, impacts or
Environmental Liabilities that could not reasonably be expected to have a
Material Adverse Effect.
6.12 Sale-Leasebacks.
No Credit Party shall engage in any sale-leaseback, synthetic lease
or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness.
45
No Credit Party shall cancel any claim or debt owing to it, except
for reasonable consideration negotiated on an arm's-length basis and in the
ordinary course of its business consistent with past practices.
6.14 Restricted Payments.
No Credit Party shall make any Restricted Payment, except (a)
intercompany loans and advances to the extent permitted by Section 6.3, (b)
dividends and distributions by Subsidiaries of Borrower paid to Borrower, (c)
Permitted Dividend Payments, (d) the Redemption Dividend provided the same is
paid on the Closing Date, (e) employee loans permitted under Section 6.4(b), (f)
scheduled payments of interest with respect to Subordinated Debt; (g) scheduled
payment of any Seller Obligations; (h) any redemption, repurchase, retirement,
defeasance or other acquisition of any equity interest of any Credit Party, in
exchange for, or out of the net cash proceeds of the substantially concurrent
sale of stock or other equity interests of such Person; (i) the redemption,
repurchase, retirement, defeasance or other acquisition of the Preferred Stock
for an amount of not more than $10,000,000 provided the same occurs not later
than sixty days following the Closing Date; and (j) repurchases of capital stock
or other equity interests deemed to occur upon the exercise of stock options and
warrants issued in connection with Permitted Equity Issuances; provided, that
(i) no Default or Event of Default has occurred and is continuing or would
result after giving effect to any Restricted Payment pursuant to clause (c), and
(f) above, and (ii) the timing of the Restricted Payments referred to in clause
(f) above shall be set at dates that permit the delivery of Financial Statements
necessary to determine current compliance with the Financial Covenants prior to
each such payment.
6.15 Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its corporate name or trade name or
(b) change its state of incorporation or organization, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral (provided that the foregoing shall not
limit, restrict or prohibit Borrower from moving or relocating Collateral from
and to locations which are set forth on Disclosure Schedule 3.2 or with respect
to which Borrower has otherwise complied with the provisions of this Section
6.15), in each case without at least 30 days prior written notice to
Administrative Agent and after Administrative Agent's written acknowledgment
that any reasonable action requested by Administrative Agent in connection
therewith, including to continue the perfection of any Liens in favor of
Administrative Agent, on behalf of Lenders, in any Collateral, has been
completed or taken, and provided that any such new location shall be in the
continental United States. Without limiting the foregoing, no Credit Party shall
change its name, identity or corporate structure in any manner that might make
any financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-506 of the Code or any other then
applicable provision of the Code except upon prior written notice to
Administrative Agent and after Administrative Agent's written acknowledgment
that any reasonable action requested by Administrative Agent in connection
therewith, including to continue the perfection of any Liens in favor of
Administrative Agent, on behalf of Lenders, in any Collateral, has been
completed or taken. No Credit Party shall change its Fiscal Year.
46
6.16 No Impairment of Intercompany Transfers.
No Credit Party shall directly or indirectly enter into or become
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement, the other Loan Documents and the Subordinated Documents as the
same may exist on the Closing Date, or be modified from time to time thereafter
in a manner not prohibited by Section 6.19) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions, or the making or repayment of
intercompany loans by a Subsidiary of Borrower to Borrower or between Credit
Parties.
6.17 No Speculative Transactions.
No Credit Party shall enter into any Hedge Agreement, except solely
to hedge against fluctuations in the prices of commodities owned or purchased by
it and the values of foreign currencies receivable or payable by it and interest
swaps, caps or collars.
6.18 Leases; Real Estate Purchases.
No Credit Party shall enter into any operating lease for Rolling
Stock if the aggregate of all such operating lease payments payable in any
Fiscal Year for all Credit Parties on a consolidated basis would exceed
$6,500,000. No Credit Party shall enter into any operating lease for Equipment
(other than Rolling Stock) if the aggregate of all such operating lease payments
payable in any Fiscal Year for all Credit Parties on a consolidated basis would
exceed $1,500,000. No Credit Party shall enter into any operating lease for Real
Estate if the aggregate of all such operating lease payments payable in any
Fiscal Year for all Credit Parties on a consolidated basis would exceed
$1,450,000. Except as permitted under Section 6.1 in connection with a Permitted
Acquisition, no Credit Party shall, from and after the Closing Date, purchase a
fee simple ownership in Real Estate.
6.19 Changes Relating to Subordinated Debt.
(a) No Credit Party shall change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith)
if the effect of such amendment is to: (a) increase the interest rate on
such Subordinated Debt; (b) change the dates upon which payments of
principal or interest are due on such Subordinated Debt other than to
extend such dates; (c) change any default or event of default other than to
delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt that is more restrictive
than contained herein; (d) change the redemption or prepayment provisions
of such Subordinated Debt other than to extend the dates therefor or to
reduce the premiums payable in connection therewith; (e) grant any security
or collateral to secure payment of such Subordinated Debt; or (f) change or
amend any other term if such change or amendment would materially increase
the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse
to any Credit Party, any Agent or any Lender.
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7. TERM
7.1 Termination.
The financing arrangements contemplated hereby shall be in effect
until the Commitment Termination Date, and the Loans and all other Obligations
shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of
Agents and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of each
Agent and Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default.
The occurrence of any one or more of the following events (regardless
of the reason therefor) shall constitute an "Event of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of the Loans
when due and payable, (ii) fails to make any payment of interest on the
Loans within 3 days following the date such payments are due and payable,
(iii) fails to make any payment of Fees owing in respect of the Loans
within 5 days following the date such payments are due and payable, or (iv)
fails to pay Administrative Agent or Revolving Credit Agent any other
Obligation within 10 days following such Agent's demand for such
reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe any
of the provisions of Sections 1.4, 1.8, 5.4(a), 5.11 or 6, or any of the
provisions set forth in Annexes C or G, respectively.
(c) Borrower fails or neglects to perform, keep or observe any of the
provisions of Section 4.1 or any provisions set forth in Annex E, and the
same shall remain unremedied for 5 Business Days or more.
48
(d) Any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of
this Section 8.1) and the same shall remain unremedied for 20 days or more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within
any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any
Indebtedness or Guaranteed Indebtedness (other than the Obligations) of any
Credit Party in excess of $500,000 in the aggregate (including (x) undrawn
committed or available amounts and (y) amounts owing to all creditors under
any combined or syndicated credit arrangements), or (ii) causes, or permits
any holder of such Indebtedness or Guaranteed Indebtedness or a trustee to
cause, Indebtedness or Guaranteed Indebtedness or a portion thereof in
excess of $500,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment, or cash
collateral in respect thereof to be demanded, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder
or trustee.
(f) Any information contained in any representation or warranty herein
or in any Loan Document or in any written statement, report, financial
statement or certificate made or delivered to Administrative Agent,
Revolving Credit Agent, or any Lender by any Credit Party is untrue or
incorrect in any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of $500,000 or
more are attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors of any Credit Party and such
condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party seeking
a decree or order in respect of such Credit Party (i) under the Bankruptcy
Code, or any other applicable federal, state or foreign bankruptcy or other
similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for
any substantial part of any such Credit Party's assets, or (iii) ordering
the winding-up or liquidation of the affairs of such Credit Party, and such
case or proceeding shall remain undismissed or unstayed for 60 days or more
or a decree or order granting the relief sought in such case or proceeding
shall be entered by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consents to or fails to contest in a
timely and appropriate manner the institution of proceedings thereunder or
the filing of any such petition or the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee or sequestrator (or
similar official) for such Credit Party or for any substantial part of any
such Credit Party's assets, (iii) makes an assignment for the benefit of
creditors, (iv) takes any action in furtherance of any of the foregoing; or
(v) admits in writing its inability to, or is generally unable to, pay its
debts as such debts become due.
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(j) A final judgment or judgments for the payment of money in excess
of $500,000 in the aggregate at any time are outstanding against one or
more of the Credit Parties and the same are not, within 60 days after the
entry thereof, discharged or execution thereof stayed or bonded pending
appeal, or such judgments are not discharged prior to the expiration of any
such stay.
(k) Any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or
shall assert in writing, or engage in any action or inaction based on any
such assertion, that any provision of any of the Loan Documents has ceased
to be or otherwise is not valid, binding and enforceable in accordance with
its terms), or any Lien created under any Loan Document ceases to be a
valid and perfected first priority Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered
thereby.
(l) Any Change of Control occurs.
(m) Any event occurs which is not insured and as a result of which
revenue-producing activities cease or are substantially curtailed at any of
Borrower's operations located in Coldwater, Michigan, Sioux City, Iowa, Los
Angeles, California, or Newark, New Jersey.
(n) Any Event of Default by Borrower occurs and is continuing under
any of the following agreements or any of the following agreements shall be
terminated for any reason: the Subordinated Notes and the Subordinated
Documents.
8.2 Remedies.
(a) If any Event of Default has occurred and is continuing,
Administrative Agent may (and at the written request of the Requisite
Revolving Lenders shall), without notice, inform the Revolving Credit Agent
to suspend (and upon such notice Revolving Credit Agent agrees to suspend)
the Revolving Loan facility with respect to additional Advances and/or the
incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be
made or incurred in Administrative Agent's sole discretion (or in the sole
discretion of the Requisite Revolving Lenders, if such suspension occurred
at their direction) so long as such Event of Default is continuing. If any
Event of Default has occurred and is continuing, Administrative Agent may
(and at the written request of Requisite Lenders shall), without notice
except as otherwise expressly provided herein, increase the rate of
interest applicable to the Loans and the Letter of Credit Fees to the
Default Rate.
(b) If any Event of Default has occurred and is continuing,
Administrative Agent may (and at the written request of the Requisite
Lenders shall, except as specifically set forth below), without notice:(i),
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inform the Revolving Credit Agent to terminate (and upon such notice
Revolving Credit Agent agrees to terminate) the Revolving Loan facility
with respect to further Advances or the incurrence of further Letter of
Credit Obligations; (ii) declare all or any portion of the Obligations,
including all or any portion of any Loan to be forthwith due and payable,
and require that the Letter of Credit Obligations be cash collateralized as
provided in Annex B, all without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by Borrower and each
other Credit Party; or (iii) exercise any rights and remedies provided to
Administrative Agent under the Loan Documents or at law or equity,
including all remedies provided under the Code; provided, that upon the
occurrence of an Event of Default specified in Sections 8.1(h) or (i), the
Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become
immediately due and payable without declaration, notice or demand by any
Person. Notwithstanding anything herein to the contrary, Administrative
Agent with respect to any other Mortgage, shall have no obligation to
exercise any remedies under any Mortgages, including the Initial Mortgages,
unless Administrative Agent shall have, in its sole and absolute
discretion, determined to exercise any such remedies. For the avoidance of
doubt, neither the Lenders, nor any of them (including the Requisite
Lenders), shall have the right to direct Administrative Agent to exercise
remedies with respect to Mortgages.
8.3 Waivers by Credit Parties.
Except as otherwise provided for in this Agreement or by applicable
law, each Credit Party waives (including for purposes of Section 12): (a)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Administrative Agent on which any
Credit Party may in any way be liable, and hereby ratifies and confirms whatever
Administrative Agent may do in this regard, (b) all rights to notice and a
hearing prior to Administrative Agent's taking possession or control of, or to
Administrative Agent's replevy, attachment or levy upon, the Collateral or any
bond or security that might be required by any court prior to allowing
Administrative Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENTS
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any
time or times, the Loan Documents, Loans, Letter of Credit Obligations and
any Commitment or any portion thereof or interest therein, including any
Lender's rights, title, interests, remedies, powers or duties thereunder.
Any assignment by a Lender shall: (i) require the consent of Administrative
Agent (which consent shall not be unreasonably withheld or delayed) and the
execution of an assignment agreement (an "Assignment Agreement")
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substantially in the form attached hereto as Exhibit 9.1(a) and otherwise
in form and substance reasonably satisfactory to, and acknowledged by,
Administrative Agent; (ii) be conditioned on such assignee Lender
representing to the assigning Lender and Administrative Agent that it is
purchasing the applicable Loans to be assigned to it for its own account,
for investment purposes and not with a view to the distribution thereof;
(iii) after giving effect to any such partial assignment, the assignee
Lender shall have Commitments in an amount at least equal to $5,000,000 and
the assigning Lender shall have retained Commitments in an amount at least
equal to $5,000,000; (iv) include a payment to Administrative Agent of an
assignment fee of $3,500; and (v) so long as no Event of Default has
occurred and is continuing, require the consent of Borrower, which shall
not be unreasonably withheld or delayed; provided that no such consent
shall be required for an assignment to a Qualified Assignee qualifying
under clause (a) of the definition of Qualified Assignee. In the case of an
assignment by a Lender under this Section 9.1, the assignee shall have, to
the extent of such assignment, the same rights, benefits and obligations as
all other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Borrower hereby
acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrower to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to
make Loans hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share of the applicable Commitment. In the event any
Agent or Lender assigns or otherwise transfers all or any part of the
Obligations, such Agent or Lender shall so notify Borrower and Borrower
shall, upon the request of such Agent or Lender, execute new Notes in
exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), (i) any Lender may at any time
pledge the Obligations held by it and such Lender's rights under this
Agreement and the other Loan Documents to a Federal Reserve Bank; provided
that no such pledge to a Federal Reserve Bank shall release such Lender
from such Lender's obligations hereunder or under any other Loan Document,
and (ii) any Lender that is an investment fund may assign the Obligations
held by it and such Lender's rights under this Agreement and the other Loan
Documents to another investment fund managed by the same investment
advisor; provided that such Lender shall notify Agents of any such
assignment for purposes of maintaining the Loan Account in accordance with
Section 1.12.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable
by Borrower hereunder shall be determined as if that Lender had not sold
such participation, and that the holder of any such participation shall not
be entitled to require such Lender to take or omit to take any action
hereunder except actions directly affecting (i) any reduction in the
principal amount of, or interest rate or Fees payable with respect to, any
Loan in which such holder participates, (ii) any extension of the scheduled
amortization of the principal amount of any Loan in which such holder
participates or the final maturity date thereof, and (iii) any release of
all or substantially all of the Collateral (other than in accordance with
the terms of this Agreement, the Collateral Documents or the other Loan
Documents). Solely for purposes of Sections 1.15, 1.16 and 9.8, Borrower
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acknowledges and agrees that a participation shall give rise to a direct
obligation of Borrower to the participant and the participant shall be
considered to be a "Lender" and for the avoidance of doubt such participant
shall be required to comply with the obligations applicable to Lenders
under Section 1.15. Except as set forth in the preceding sentence neither
Borrower nor any Credit Party shall have any obligation or duty to any
participant. Neither Administrative Agent, Revolving Credit Agent, nor any
Lender (other than the Lender selling a participation) shall have any duty
to any participant and may continue to deal solely with the Lender selling
a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender shall,
as between Borrower and that Lender, or Administrative Agent and that
Lender, or Revolving Credit Agent and that Lender, be relieved of any of
its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the
Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any
such assignment or participation, including the execution and delivery of
any and all agreements, notes and other documents and instruments as shall
be reasonably requested and, if requested by Administrative Agent in its
reasonable discretion, the preparation of informational materials for, and
the participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy, in all material respects, of all
descriptions of the Credit Parties and their respective affairs contained
in any selling materials provided by them and all other information
provided by them and included in such materials, except that any
Projections delivered by Borrower shall only be certified by Borrower as
having been prepared by Borrower in compliance with the representations
contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided
that such Lender shall obtain from assignees or participants
confidentiality covenants substantially equivalent to those contained in
Section 11.8.
(f) No Lender shall assign or sell participations in any portion of
its Loans or Commitments to a potential Lender or participant, if, as of
the date of the proposed assignment or sale, the assignee Lender or
participant would be subject to capital adequacy or similar requirements
under Section 1.16(a), increased costs under Section 1.16(b), an inability
to fund LIBOR Loans under Section 1.16(c), or Taxes in accordance with
Section 1.15 or would be entitled to additional amounts or indemnity
payments pursuant to Section 1.15(a) or (b).
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(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding
vehicle (an "SPC"), identified as such in writing by the Granting Lender to
Administrative Agent and Borrower, the option to provide to Borrower all or
any part of any Loans that such Granting Lender would otherwise be
obligated to make to Borrower pursuant to this Agreement; provided that (i)
nothing herein shall constitute a commitment by any SPC to make any Loan;
and (ii) if an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting
Lender to the same extent, and as if such Loan were made by such Granting
Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with
the Granting Lender). Any SPC may (i) with notice to, but without the prior
written consent of, Borrower and Administrative Agent and assign all or a
portion of its interests in any Loans to the Granting Lender or to any
financial institutions (consented to by Borrower and Administrative Agent)
providing liquidity and/or credit support to or for the account of such SPC
to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPC. This Section 9.1(g) may not
be amended without the prior written consent of each Granting Lender, all
or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or
waiver of any provision of any Loan Document or the obligation to pay any
amount otherwise payable by the Granting Lender under the Loan Documents,
continue to be the Lender of record hereunder.
9.2 Appointment of Agents.
(a) GE Capital is hereby appointed to act on behalf of all Lenders as
Administrative Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agents and
Lenders and no Credit Party nor any other Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents,
Administrative Agent shall act solely as an agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any Credit Party or any other
Person. Administrative Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Administrative Agent shall be mechanical and
administrative in nature and Administrative Agent shall not have, or be
deemed to have, by reason of this Agreement, any other Loan Document or
otherwise a fiduciary relationship in respect of any Lender. Except as
expressly set forth in this Agreement and the other Loan Documents,
Administrative Agent shall not have any duty to disclose, and shall not be
liable for failure to disclose, any information relating to any Credit
Party or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital or any of its Affiliates in any
capacity. Neither Administrative Agent nor any of its Affiliates nor any of
their respective officers, directors, employees, agents or representatives
shall be liable to any Lender for any action taken or omitted to be taken
by it hereunder or under any other Loan Document, or in connection herewith
or therewith, except for damages caused by its or their own gross
negligence or willful misconduct.
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(b) If Administrative Agent shall request instructions from Requisite
Lenders, Requisite Revolving Lenders or all affected Lenders with respect
to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until
Administrative Agent shall have received instructions from Requisite
Lenders, Requisite Revolving Lenders or all affected Lenders, as the case
may be, and Administrative Agent shall not incur liability to any Person by
reason of so refraining. Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder or under any other Loan
Document (a) if such action would, in the opinion of Administrative Agent,
be contrary to law or the terms of this Agreement or any other Loan
Document, (b) if such action would, in the opinion of Administrative Agent,
expose Administrative Agent to Environmental Liabilities or (c) if
Administrative Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against
Administrative Agent as a result of Administrative Agent acting or
refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Lenders, Requisite Revolving
Lenders or all affected Lenders, as applicable.
(c) Comerica is hereby appointed to act on behalf of all Revolving
Lenders as Revolving Credit Agent under this Agreement and the other Loan
Documents. In performing its functions and duties under this Agreement and
the other Loan Documents, Revolving Credit Agent shall act solely as an
agent of Revolving Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with
or for any Credit Party or any other Person. Revolving Credit Agent shall
have no duties or responsibilities except for those expressly set forth in
this Agreement and the other Loan Documents. The duties of Revolving Credit
Agent shall be mechanical and administrative in nature and Revolving Credit
Agent shall not have, or be deemed to have, by reason of this Agreement,
any other Loan Document or otherwise a fiduciary relationship in respect of
any Lender. Except as expressly set forth in this Agreement and the other
Loan Documents, Revolving Credit Agent shall not have any duty to disclose,
and shall not be liable for failure to disclose, any information relating
to any Credit Party or any of their respective Subsidiaries or any Account
Debtor that is communicated to or obtained by Comerica or any of its
Affiliates in any capacity. Neither Revolving Credit Agent nor any of its
Affiliates nor any of their respective officers, directors, employees,
agents or representatives shall be liable to any Lender for any action
taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused
by its or their own gross negligence or willful misconduct.
(d) If Revolving Credit Agent shall request instructions from
Requisite Revolving Lenders with respect to any act or action (including
failure to act) in connection with this Agreement or any other Loan
Document, then Revolving Credit Agent shall be entitled to refrain from
55
such act or taking such action unless and until Revolving Credit Agent
shall have received instructions from Requisite Revolving Lenders and
Revolving Credit Agent shall not incur liability to any Person by reason of
so refraining. Revolving Credit Agent shall be fully justified in failing
or refusing to take any action hereunder or under any other Loan Document
(a) if such action would, in the opinion of Revolving Credit Agent, be
contrary to law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of Revolving Credit Agent, expose
Revolving Credit Agent to Environmental Liabilities or (c) if Revolving
Credit Agent shall not first be indemnified to its satisfaction against any
and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against
Revolving Credit Agent as a result of Revolving Credit Agent acting or
refraining from acting hereunder or under any other Loan Document in
accordance with the instructions of Requisite Revolving Lenders.
9.3 Agents' Reliance, Etc.
Neither Administrative Agent nor any of its Affiliates nor Revolving
Credit Agent nor any of its Affiliates nor any of their respective directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for damages caused by its or their own gross negligence
or willful misconduct. Without limiting the generality of the foregoing,
Administrative Agent and Revolving Credit Agent: (a) may treat the payee of any
Note as the holder thereof until Administrative Agent and Revolving Credit Agent
receive written notice of the assignment or transfer thereof signed by such
payee and in form reasonably satisfactory to Administrative Agent and Revolving
Credit Agent; (b) may consult with legal counsel, independent public accountants
and other experts selected by either of them and shall not be liable for any
action taken or omitted to be taken by them in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4 GE Capital; Comerica and Affiliates.
With respect to their Commitments hereunder, GE Capital and Comerica
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though they were not
Administrative Agent and Revolving Credit Agent, respectively; and the term
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"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital and Comerica in their individual capacity. GE Capital and its Affiliates
and Comerica and its Affiliates may lend money to, invest in, and generally
engage in any kind of business with, any Credit Party, any of their Affiliates
and any Person who may do business with or own securities of any Credit Party or
any such Affiliate, all as if GE Capital were not Administrative Agent and
Comerica were not Revolving Credit Agent, and without any duty to account
therefor to Lenders. GE Capital, Comerica and their Affiliates may accept fees
and other consideration from any Credit Party for services in connection with
this Agreement or otherwise without having to account for the same to Lenders.
Each Lender acknowledges the potential conflict of interest between GE Capital
and Comerica as a Lender holding disproportionate interests in the Loans and GE
Capital as Administrative Agent and Comerica as Revolving Credit Agent.
9.5 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent or any other Lender and based on the Financial
Statements referred to in Section 3.4(a) and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon any Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification.
Lenders agree to indemnify Administrative Agent and Revolving Credit
Agent (to the extent not reimbursed by Credit Parties and without limiting the
obligations of Borrower hereunder), ratably according to their respective Pro
Rata Shares, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against Administrative Agent or Revolving Credit Agent in any way
relating to or arising out of this Agreement or any other Loan Document or any
action taken or omitted to be taken by Administrative Agent or Revolving Credit
Agent in connection therewith; provided, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Administrative
Agent's or Revolving Credit Agent's gross negligence or willful misconduct.
Without limiting the foregoing, each Lender agrees to reimburse Administrative
Agent and Revolving Credit Agent promptly upon demand for such Agent's ratable
share of any out-of-pocket expenses (including counsel fees) incurred by such
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that such Agent is not reimbursed for such expenses by Credit Parties.
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9.7 Successor Agent.
Either Agent may resign at any time by giving not less than 30 days'
prior written notice thereof to Lenders and Borrower. Upon any such resignation,
the Requisite Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment within 30 days after the resigning Agent's giving
notice of resignation, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent, which shall be a Lender, if a Lender is willing to
accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if
such commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $750,000,000. If no successor Agent has been appointed
pursuant to the foregoing, within 30 days after the date such notice of
resignation was given by the resigning Agent, such resignation shall become
effective and the Requisite Lenders shall thereafter perform all the duties of
such Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Requisite
Lenders hereunder shall be subject to the approval of Borrower, such approval
not to be unreasonably withheld or delayed; provided that such approval shall
not be required if an Event of Default has occurred and is continuing. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent. Upon the earlier of the acceptance
of any appointment as an Agent hereunder by a successor Agent or the effective
date of the resigning Agent's resignation, the resigning Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as an Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments.
(a) In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default and subject
to Section 9.9(f), each Lender is hereby authorized at any time or from
time to time, without notice to any Credit Party or to any other Person,
any such notice being hereby expressly waived, to offset and to appropriate
and to apply any and all balances held by it at any of its offices for the
account of Borrower or any Guarantor (regardless of whether such balances
are then due to Borrower or any Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for
the credit or for the account of Borrower or any Guarantor against and on
account of any of the Obligations that are not paid when due; provided that
the Lender exercising such offset rights shall give notice thereof to the
affected Credit Party promptly after exercising such right; and provided,
further, that any Lender's failure to give such notice shall not create any
liability on the part of such Lender or any of the Agents or other Lenders,
or give rise to any claim by any Credit Party against such Lender or any of
the Agents or other Lenders. Notwithstanding anything herein to the
contrary, each of the Agents and Lenders agree that any setoff of any
Deposit Account pursuant to this Section 9.8 shall be applied to the
Obligations as provided herein, and shall not be applied to any other debt
or obligation of any Credit Party to such Agent or Lender.
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(b) Any Lender exercising a right of setoff or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share
thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata
Share of the Obligations as would be necessary to cause such Lender to
share the amount so offset or otherwise received with each other Lender or
holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.13, 1.15
or 1.16).
(c) Each Credit Party that is a Borrower or Guarantor agrees, to the
fullest extent permitted by law, that (a) any Lender may exercise its right
to offset with respect to amounts in excess of its Pro Rata Share of the
Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the
Loans made or other Obligations held by other Lenders or holders may
exercise all rights of offset, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the
amount of such participation. Notwithstanding the foregoing, if all or any
portion of the offset amount or payment otherwise received is thereafter
recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
(d) All Deposit Accounts which are held by any Agent or any Lender
are, pursuant to the terms of the Security Agreement, subject to a Lien to
secure the Obligations in favor of Administrative Agent on behalf of
Lenders and each Agent and Lender hereby acknowledges and agrees that it
shall hold and retain such Deposit Accounts as agent for the Agents and the
Lenders in order to maintain control of such Deposit Accounts in accordance
with Section 9-104(1) of the Code.
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions
Concert.
(a) Advances; Payments.
(i) Revolving Credit Agent shall notify Revolving Lenders,
promptly after receipt of a Notice of Revolving Credit Advance and in
any event prior to 2:00 p.m. (New York time) on the date such Notice
of Revolving Advance is received, by telecopy, telephone or other
similar form of transmission. Each Revolving Lender shall make the
amount of such Lender's Pro Rata Share of such Revolving Credit
Advance available to Revolving Credit Agent in same day funds by wire
transfer to Revolving Credit Agent's account as set forth in Annex H
not later than 4:00 p.m. (New York time) on the requested funding
59
date, in the case of an Index Rate Loan, and not later than 11:00 a.m.
(New York time) on the requested funding date, in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Revolving
Credit Agent's sole discretion, before receipt of such wire
transfers), subject to the terms hereof, Revolving Credit Agent shall
make the requested Revolving Credit Advance to Borrower. All payments
by each Revolving Lender shall be made without setoff, counterclaim or
deduction of any kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Administrative Agent's election (with respect to the
Term Loan) or Revolving Credit Agent's election (with respect to the
Revolving Loan (each, a "Settlement Date"), the relevant Agent shall
advise each Lender by telephone, or telecopy of the amount of such
Lender's Pro Rata Share of principal, interest and Fees paid for the
benefit of Lenders with respect to each applicable Loan. Provided that
each Lender has funded all payments or Advances required to be made by
it and has purchased all participations required to be purchased by it
under this Agreement and the other Loan Documents as of such
Settlement Date, such Agent shall pay to each Lender such Lender's Pro
Rata Share of principal, interest and Fees paid by Borrower since the
previous Settlement Date for the benefit of such Lender on the Loans
held by it. To the extent that any Lender (a "Non-Funding Lender") has
failed to fund all such payments and Advances or failed to fund the
purchase of all such participations, such Agent shall be entitled to
set off the funding short-fall against that Non-Funding Lender's Pro
Rata Share of all payments received from Borrower. Such payments shall
be made by wire transfer to such Lender's account (as specified by
such Lender in Annex H or the applicable Assignment Agreement) not
later than 2:00 p.m. (New York time) on the next Business Day
following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Revolving Credit Agent
may assume that each Revolving Lender will make its Pro Rata Share of each
Revolving Credit Advance available to Revolving Credit Agent on each
funding date. If such Pro Rata Share is not, in fact, paid to Revolving
Credit Agent by such Revolving Lender when due, Revolving Credit Agent will
be entitled to recover such amount on demand from such Revolving Lender
without setoff, counterclaim or deduction of any kind. If any Revolving
Lender fails to pay the amount of its Pro Rata Share forthwith upon
Revolving Credit Agent's demand, Revolving Credit Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to
Revolving Credit Agent. Nothing in this Section 9.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Revolving
Credit Agent to advance funds on behalf of any Revolving Lender or to
relieve any Revolving Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that Borrower may have against any
Revolving Lender as a result of any default by such Revolving Lender
hereunder. To the extent that Revolving Credit Agent advances funds to
Borrower on behalf of any Revolving Lender and is not reimbursed therefor
on the same Business Day as such Advance is made, Revolving Credit Agent
shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Revolving Lender.
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(c) Return of Payments.
(i) If any Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will
be received by such Agent from Borrower and such related payment is
not received by such Agent, then such Agent will be entitled to
recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.
(ii) If any Agent determines at any time that any amount received
by such Agent under this Agreement must be returned to Borrower or
paid to any other Person pursuant to any insolvency law or otherwise,
then, notwithstanding any other term or condition of this Agreement or
any other Loan Document, such Agent will not be required to distribute
any portion thereof to any Lender. In addition, each Lender will repay
to such Agent on demand any portion of such amount that such Agent has
distributed to such Lender, together with interest at such rate, if
any, as such Agent is required to pay to Borrower or such other
Person, without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to make
any Revolving Credit Advance or any payment required by it hereunder on the
date specified therefor shall not relieve any other Lender (each such other
Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Revolving Credit Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance, purchase a participation or make
any other payment required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Revolving Lender" (or be included in the calculation of
"Requisite Lenders" or "Requisite Revolving Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document. At
Borrower's request, Administrative Agent or a Person reasonably acceptable
to Administrative Agent shall have the right with Administrative Agent's
consent and in Administrative Agent's sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding
Lender agrees that it shall, at Administrative Agent's request, sell and
assign to Administrative Agent or such Person, all of the Commitments of
that Non-Funding Lender for an amount equal to the principal balance of all
Loans held by such Non-Funding Lender and all accrued interest and fees
with respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Administrative Agent shall use
reasonable efforts to provide Lenders with any notice of Default or Event
of Default received by Administrative Agent from, or delivered by
Administrative Agent to, any Credit Party, with notice of any Event of
Default of which Administrative Agent has actually become aware and with
notice of any action taken by Administrative Agent following any Event of
Default; provided, that Administrative Agent shall not be liable to any
61
Lender for any failure to do so, except to the extent that such failure is
attributable to Administrative Agent's gross negligence or willful
misconduct. Lenders acknowledge that Borrower is required to provide
Financial Statements to Lenders in accordance with Annex E hereto and agree
that Administrative Agent shall have no duty to provide the same to
Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no
Lender shall take any action to protect or enforce its rights arising out
of this Agreement or the Notes (including exercising any rights of setoff)
without first obtaining the prior written consent of Administrative Agent
and Requisite Lenders, it being the intent of Lenders that any such action
to protect or enforce rights under this Agreement and the Notes shall be
taken in concert and at the direction or with the consent of Administrative
Agent and Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns.
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, Agents, Lenders and their
respective successors and permitted assigns (including, in the case of any
Credit Party, a debtor-in-possession on behalf of such Credit Party), except as
otherwise provided herein or therein. No Credit Party may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express
written consent of Agents and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Agents and Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agents and Lenders with respect to the
transactions contemplated hereby and no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement.
The Loan Documents constitute the complete agreement between the
parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in Section 11.2. Any letter of interest,
commitment letter, or fee letter (other than the GE Capital Fee Letter) or
confidentiality agreement between any Credit Party and any Agent or any Lender
or any of their respective Affiliates, predating this Agreement and relating to
a financing of substantially similar form, purpose or effect shall be superseded
by this Agreement.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agents, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by
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any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Administrative Agent and the Credit
Parties, and by Requisite Lenders, Requisite Revolving Lenders or all
affected Lenders, as applicable. Except as set forth in clauses (b) and (c)
below, all such amendments, modifications, terminations or waivers
requiring the consent of any Lenders shall require the written consent of
Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that waives compliance with
the conditions precedent set forth in Section 2.2 to the making of any Loan
or the incurrence of any Letter of Credit Obligations shall be effective
unless the same shall be in writing and signed by Administrative Agent,
Revolving Credit Agent, Requisite Revolving Lenders and Borrower.
Notwithstanding anything contained in this Agreement to the contrary, no
waiver or consent with respect to any Default or any Event of Default shall
be effective for purposes of the conditions precedent to the making of
Loans or the incurrence of Letter of Credit Obligations set forth in
Section 2.2 unless the same shall be in writing and signed by
Administrative Agent, Revolving Credit Agent, Requisite Revolving Lenders
and Borrower.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Administrative Agent and each Lender directly
affected thereby: (i) increase the principal amount of any Lender's
Commitment (which action shall be deemed to directly affect all Lenders)
(it being understood that a waiver of an Event of Default, mandatory
prepayment or mandatory reduction of the Commitment shall not constitute an
increase of any Commitment of any Lender); (ii) reduce the principal of,
rate of interest on or Fees payable with respect to any Loan or Letter of
Credit Obligations of any affected Lender (it being understood that any
change to the definition of Leverage Ratio or in the component definitions
thereof shall not constitute a reduction in the rate); (iii) extend any
scheduled payment date (other than the waiver or extension of payment dates
of mandatory prepayments under Section 1.3(b)(ii)-(iii)) or final maturity
date of the principal amount of any Loan of any affected Lender; (iv)
waive, forgive, defer, extend or postpone any payment of interest or Fees
as to any affected Lender; (v) except as otherwise permitted herein or in
the other Loan Documents, release, or permit any Credit Party to sell or
otherwise dispose of, any Collateral with a value exceeding $5,000,000 in
the aggregate (which action shall be deemed to directly affect all
Lenders); (vi) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans that shall be required for Lenders or
any of them to take any action hereunder; (vii) increase the Borrowing
Availability (which action shall be deemed to directly affect all Lenders);
and (viii) amend or waive this Section 11.2 or the definitions of the terms
"Requisite Lenders" or "Requisite Revolving Lenders". Furthermore, no
amendment, modification, termination or waiver affecting the rights or
duties of either Agent or L/C Issuer under this Agreement or any other Loan
Document shall be effective unless in writing and signed by such Agent or
L/C Issuer, as the case may be, in addition to Lenders required hereinabove
to take such action. Each amendment, modification, termination or waiver
shall be effective only in the specific instance and for the specific
purpose for which it was given. No amendment, modification, termination or
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waiver shall be required for Administrative Agent to take additional
Collateral pursuant to any Loan Document. No notice to or demand on any
Credit Party in any case shall entitle such Credit Party or any other
Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon Lenders
and their respective successors and assigns, each holder of the Notes at
the time outstanding and each future holder of the Notes. Notwithstanding
anything herein to the contrary, the Administrative Agent shall have the
right, in its sole and absolute discretion, and without the consent of, or
notice to the Lenders, to release all or any of the Mortgages other than
the Initial Mortgages.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is
not obtained as described in this clause (i) and in clauses (ii),
(iii) and (iv) below being referred to as a "Non-Consenting Lender"),
(ii) requiring the consent of Requisite Revolving Lenders, the
consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite
Revolving Lenders is not obtained, or
(iii) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Administrative Agent is not a Non-Consenting Lender, at
Borrower's request, Administrative Agent or a Person reasonably acceptable to
Administrative Agent shall have the right with Administrative Agent's consent
and in Administrative Agent's reasonable discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Administrative Agent's
request, sell and assign to Administrative Agent or such Person, all of the
Commitments of such Non-Consenting Lenders for an amount equal to the principal
balance of all Loans held by the Non-Consenting Lenders and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agents and Lenders, and so
long as no suits, actions, proceedings or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or liabilities
that are Indemnified Liabilities, Administrative Agent shall deliver to
Borrower termination statements, mortgage releases and other documents
necessary or appropriate to evidence the termination of the Liens securing
payment of the Obligations.
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11.3 Fees and Expenses.
Borrower shall reimburse (i) Administrative Agent for all fees, costs
and expenses (including the reasonable fees and expenses of all of its counsel,
advisors, consultants and auditors) and (ii) Administrative Agent (and, with
respect to clauses (b), (c) and (d) below, all Lenders) for all fees, costs and
out-of-pocket expenses, including the reasonable fees, costs and expenses of
counsel or other advisors (including environmental and management consultants
and appraisers), incurred in connection with the negotiation and preparation of
the Loan Documents and incurred in connection with:
(a) any amendment, modification or waiver of, consent with respect to,
or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration
of the Loans made pursuant hereto or its rights hereunder or thereunder;
(b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Administrative Agent, any Lender, Borrower or any
other Person and whether as a party, witness or otherwise) in any way
relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection herewith or therewith,
including any litigation, contest, dispute, suit, case, proceeding or
action, and any appeal or review thereof, in connection with a case
commenced by or against any or all of the Borrower or any other Person that
may be obligated to any Agent by virtue of the Loan Documents; including
any such litigation, contest, dispute, suit, proceeding or action arising
in connection with any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; provided that in the case of
reimbursement of counsel for Lenders other than Administrative Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
provided, further, that no Person shall be entitled to reimbursement under
this clause (c) in respect of any litigation, contest, dispute, suit,
proceeding or action to the extent any of the foregoing results from such
Person's gross negligence or willful misconduct;
(c) any attempt to enforce any remedies of Administrative Agent
against any or all of the Credit Parties or any other Person that may be
obligated to any Agent or any Lender by virtue of any of the Loan
Documents, including any such attempt to enforce any such remedies in the
course of any work-out or restructuring of the Loans during the pendency of
one or more Events of Default; provided, that in the case of reimbursement
of counsel for Lenders other than Administrative Agent, such reimbursement
shall be limited to one counsel for all such Lenders;
(d) any workout or restructuring of the Loans during the pendency of
one or more Events of Default; and
(e) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
65
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all out-of-pocket expenses,
costs, charges and other fees incurred by such counsel and others in connection
with or relating to any of the events or actions described in this Section 11.3,
all of which shall be payable, on demand, by Borrower to Administrative Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges; and
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.
11.4 No Waiver.
Agents' or any Lender's failure, at any time or times, to require
strict performance by the Credit Parties of any provision of this Agreement or
any other Loan Document shall not waive, affect or diminish any right of such
Agent or Lender thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of Section 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by any Agent or Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Administrative Agent and the
applicable required Lenders, and directed to Borrower specifying such suspension
or waiver.
11.5 Remedies.
Agents' and Lenders' rights and remedies under this Agreement shall
be cumulative and nonexclusive of any other rights and remedies that any Agent
or Lender may have under any other agreement, including the other Loan
Documents, by operation of law or otherwise. Recourse to the Collateral shall
not be required.
11.6 Severability.
Wherever possible, each provision of this Agreement and the other
Loan Documents shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement or any other
Loan Document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms.
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Except as otherwise provided in this Agreement or any of the other
Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
11.8 Confidentiality.
Each Agent and Lender agree to use commercially reasonable efforts
(equivalent to the efforts such Agent or Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by the Credit Parties and
designated as confidential for a period of 2 years following receipt thereof,
except that any Agent or Lender may disclose such information (a) on a
confidential basis to Persons employed or engaged by such Agent or Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any bona fide assignee or participant or potential assignee
or participant that has agreed to comply with the covenant contained in this
Section 11.8 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (a) above); (c) as required or requested
by any Governmental Authority or reasonably believed by such Agent or Lender to
be compelled by any court decree, subpoena or legal or administrative order or
process; (d) as, on the advice of such Agent's or Lender's counsel, is required
by law; (e) in connection with the exercise of any right or remedy under the
Loan Documents or in connection with any Litigation to which such Agent or
Lender is a party; or (f) that ceases to be confidential through no fault of any
Agent or Lender.
11.9 GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS,
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY, EACH AGENT AND EACH
LENDER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENTS AND
LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO
ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS; PROVIDED, THAT AGENTS, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE
THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT
SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE AGENT OR REVOLVING CREDIT
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER APPROPRIATE
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
67
ADMINISTRATIVE AGENT. EACH CREDIT PARTY, EACH AGENT AND EACH LENDER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH AGENT, LENDER AND CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH PERSON MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY, EACH AGENT AND EACH LENDER HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY, AGENT OR
LENDER AT THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PERSON'S ACTUAL RECEIPT
THEREOF OR 3 DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE
PREPAID.
11.10 Notices.
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile
number indicated in Annex I or to such other address (or facsimile number) as
may be substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower or Administrative Agent) designated in Annex I to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
11.11 Section Titles.
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The Section titles and Table of Contents contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
11.12 Counterparts.
This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement. Delivery of an executed counterpart of this Agreement by telecopier
or facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
11.13 WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG AGENTS, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters.
Each Credit Party executing this Agreement agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure, with the exception of disclosures mandated by the rules and
regulations of the SEC (but only to the extent so mandated, from time to time)
using the name of GE Capital or its affiliates or referring to this Agreement,
the other Loan Documents or the Related Transactions Documents without at least
2 Business Days' prior notice to GE Capital and without the prior written
consent of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure. Each Credit Party consents to the
publication by Agents or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agents reserve the right to provide to industry trade organizations information
necessary and customary for inclusion in league table measurements.
11.15 Reinstatement.
This Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against Borrower for liquidation
or reorganization, should Borrower become insolvent or make an assignment for
69
the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of Borrower's assets, and shall
continue to be effective or to be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.16 Advice of Counsel.
Each of the parties represents to each other party hereto that it has
discussed this Agreement and, specifically, the provisions of Sections 11.9 and
11.13, with its counsel.
11.17 No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
11.18 Limitation on Security Interest with Respect to Foreign
Subsidiaries.
Notwithstanding any provision set forth herein or in any other Loan
Document to the contrary, in no event shall (a) the assets of any foreign
Subsidiary of a Credit Party constitute security or secure, or such assets or
the proceeds of such assets be required to be available for, payment of the
Obligations of any Credit Party and (b) more than 65% of the Stock of each
first-tier foreign Subsidiary of a Credit Party be required to be pledged to
secure the Obligations of any Credit Party.
11.19 USA Patriot Act Notification. The following notification is
provided to Borrower pursuant to Section 326 of the USA Patriot Act of 2001, 31
U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. TO HELP THE
GOVERNMENT FIGHT THE FUNDING OF TERRORISM AND MONEY LAUNDERING ACTIVITIES,
FEDERAL LAW REQUIRES ALL FINANCIAL INSTITUTIONS TO OBTAIN, VERIFY, AND RECORD
INFORMATION THAT IDENTIFIES EACH PERSON OR ENTITY THAT OPENS AN ACCOUNT,
INCLUDING ANY DEPOSIT ACCOUNT, TREASURY MANAGEMENT ACCOUNT, LOAN, OTHER
EXTENSION OF CREDIT, OR OTHER FINANCIAL SERVICES PRODUCT. WHAT THIS MEANS FOR
BORROWER: WHEN BORROWER OPENS AN ACCOUNT, IF BORROWER IS AN INDIVIDUAL, AGENTS,
OR ANY LENDER (AS THE CASE MAY BE), WILL ASK FOR BORROWER'S NAME, RESIDENTIAL
ADDRESS, DATE OF BIRTH, AND OTHER INFORMATION THAT WILL ALLOW AGENTS, OR ANY
LENDER (AS THE CASE MAY BE), TO IDENTIFY BORROWER, AND, IF BORROWER IS NOT AN
INDIVIDUAL, AGENTS, OR ANY LENDER (AS THE CASE MAY BE), WILL ASK FOR BORROWER'S
70
NAME, EMPLOYER IDENTIFICATION NUMBER, BUSINESS ADDRESS, AND OTHER INFORMATION
THAT WILL ALLOW AGENTS, OR ANY LENDER (AS THE CASE MAY BE), TO IDENTIFY
BORROWER. AGENTS, OR ANY LENDER (AS THE CASE MAY BE), MAY ALSO ASK, IF BORROWER
IS AN INDIVIDUAL, TO SEE BORROWER'S DRIVER'S LICENSE OR OTHER IDENTIFYING
DOCUMENTS, AND, IF BORROWER IS NOT AN INDIVIDUAL, TO SEE BORROWER'S LEGAL
ORGANIZATIONAL DOCUMENTS OR OTHER IDENTIFYING DOCUMENTS.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURE PAGES TO FOLLOW]
71
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWER
DARLING INTERNATIONAL INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Title: Executive Vice President
------------------------------
SIGNATURE PAGE TO CREDIT AGREEMENT
ADMINISTRATIVE AGENT AND LENDER
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent and Lender
By: /s/ Texas ▇▇▇▇▇▇
---------------------------------
Duly Authorized Signatory
SIGNATURE PAGE TO CREDIT AGREEMENT
REVOLVING CREDIT AGENT AND LENDER
COMERICA BANK,
as Revolving Credit Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Senior Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
LENDER
U.S. BANK NATIONAL ASSOCIATION
as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
SIGNATURE PAGE TO CREDIT AGREEMENT
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrower.
NONE ON THE CLOSING DATE
------------------------
SIGNATURE PAGE TO CREDIT AGREEMENT
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account.
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments),
whether arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all monies due or to become due to any Credit Party, under all purchase orders
and contracts for the sale of goods or the performance of services or both by
such Credit Party or in connection with any other transaction (whether or not
yet earned by performance on the part of such Credit Party), including the right
to receive the proceeds of said purchase orders and contracts, (e) all health
care insurance receivables and (f) all collateral security and guaranties of any
kind, given by any Account Debtor or any other Person with respect to any of the
foregoing.
"Acquisition Pro Forma" shall have the meaning ascribed thereto in
Section 6.1.
"Acquisition Projections" shall have the meaning ascribed thereto in
Section 6.1.
"Acquisition/Route Swap Costs" shall mean amounts spent from time to
time by Borrower in connection with Permitted Acquisitions including all
transaction costs and all Indebtedness, liabilities and contingent obligations,
including any Earn Out Obligation, incurred or assumed in connection therewith
or otherwise reflected in a consolidated balance sheet of Borrower and Target
and net cash disbursements made by the Credit Parties in connection with Route
Swaps permitted under Section 6.8(k).
"Activation Notice" have the meanings ascribed thereto in Annex C.
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"Additional Lenders" shall have the meaning ascribed thereto in
Section 1.19.
"Administrative Agent" means GE Capital in its capacity as
administrative agent for Lenders or its successor appointed pursuant to Section
9.7.
"Advance" means any Revolving Credit Advance.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors and (d) in the case of Borrower, the
immediate family members, spouses and lineal descendants of individuals who are
Affiliates of Borrower. For the purposes of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise; provided, however,
that the term "Affiliate" shall specifically exclude each Agent and each Lender.
"Agents" mean the Administrative Agent and the Revolving Credit
Agent.
"Agreement" means the Credit Agreement, by and among Borrower, the
other Credit Parties party thereto, GE Capital, as Administrative Agent and
Lender, Comerica, as Revolving Credit Agent and Lender, and the other Lenders
from time to time party thereto, as the same may be amended, supplemented,
restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time in
effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin,
the Applicable Revolver Index Margin, the Applicable Term Loan Index Margin, the
Applicable Revolver LIBOR Margin and the Applicable Term Loan LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Term Loan Index Margin" means the per annum interest rate
from time to time in effect and payable in addition to the Index Rate applicable
to the Term Loan, as determined by reference to Section 1.5(a).
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"Applicable Term Loan LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Term Loan, as determined by reference to Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. ss.ss.101 et seq.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower" has the meaning ascribed thereto in the preamble to the
Agreement.
"Borrowing Availability" means as of any date of determination an
amount expressed in Dollars by which (a) the lesser of (i) the Maximum Amount
and (ii) the Revolving Compliance Maximum, exceeds (b) the Revolving Loan
outstanding on such date.
"Borrowing Availability Certificate" means a certificate to be
delivered to Agents at the time of each Notice of Revolving Credit Advance in
the form included on Exhibit 1.1(a)(i) which shall set forth, among other
things, a calculation of Borrower's EBITDA, on a consolidated basis, for the
12-month period ending on the last day of the immediately preceding Fiscal
Month, Borrower's Funded Debt as of the date of such Borrowing Availability
Certificate, and such other information as may be required by either Agent from
time to time.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State New York
and in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
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paper maturing no more than one year from the date of creation thereof and
currently having an "A-1" or "A-2" rating from Standard & Poor's Ratings Group
or a "P-1" or "P-2" rating from ▇▇▇▇▇'▇ Investors Service, Inc., (iii)
certificates of deposit maturing no more than one year from the date of creation
thereof issued by commercial banks incorporated under the laws of the United
States of America, each having combined capital, surplus and undivided profits
of not less than $300,000,000 and having a senior unsecured rating of "A" or
better by a nationally recognized rating agency (an "A Rated Bank"), (iv) time
deposits maturing no more than 30 days from the date of creation thereof with A
Rated Banks and (v) mutual funds that invest solely in one or more of the
investments described in clauses (i) through (iv) above.
"Cash Management Systems" has the meaning ascribed to it in Section
1.8.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 50% or more of the issued and outstanding shares of
capital Stock of Borrower having the right to vote for the election of directors
of Borrower under ordinary circumstances; (b) during any period of twelve
consecutive calendar months, individuals who at the beginning of such period
constituted the board of directors of Borrower (together with any new directors
whose election by the board of directors of Borrower or whose nomination for
election by the Stockholders of Borrower was approved by a vote of at least a
majority of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party, wherever located.
"Closing Date" means April 2, 2004.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
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"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that in
the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of, or remedies with respect to,
Administrative Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions thereof relating to such attachment, perfection, priority or remedies
and for purposes of definitions related to such provisions.
"Collateral" means the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Administrative Agent, on behalf of itself and Lenders, to secure the
Obligations.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Mortgages, the Guaranties, the Patent Security Agreement, the
Trademark Security Agreement, the Copyright Security Agreement and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collection Account" means with respect to all payments of every type
made with respect to the Revolving Loan, including all Fees and expenses payable
to, or for the account of the Revolving Credit Agent:
Bank: Comerica Bank
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA#: ▇▇▇-▇▇▇-▇▇▇
Account#: 1880941909
Account Name: Darling International Inc.
Reference: Darling International Inc.
With respect to all payments of every type made with respect to the Term Loan
including all Fees and expenses payable to or for the account of Administrative
Agent:
Deutsche Bank
One Bankers Trust Plaza
New York, New York
ABA No.: 021 001 033
Reference: Darling Collection Account
or such other account(s) as may be specified in writing by either Agent as their
respective "Collection Account."
"Comerica" means Comerica bank, a Michigan banking corporation.
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"Commitments" means (a) as to any Lender, the aggregate of such
Lender's Revolving Loan Commitment and Term Loan Commitment as set forth on
Annex J to the Agreement or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders' Revolving
Loan Commitments and Term Loan Commitments, which aggregate commitment shall be
Sixty Seven Million Five Hundred Thousand and 00/100 Dollars ($67,500,000) on
the Closing Date, as to each of clauses (a) and (b), as such Revolving Loan
Commitments and Term Loan Commitments may be reduced, amortized, adjusted or
increased from time to time in accordance with the Agreement.
"Commitment Termination Date" means the earliest of (a) ▇▇▇▇▇ ▇,
▇▇▇▇, (▇) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrower of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Concentration Accounts" has the meaning ascribed to it in Annex C.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Administrative
Agent and (i) the issuer of uncertificated securities with respect to
uncertificated securities in the name of any Credit Party, (ii) a securities
intermediary with respect to securities, whether certificated or uncertificated,
securities entitlements and other financial assets held in a securities account
in the name of any Credit Party, (iii) a futures commission merchant or clearing
house, as applicable, with respect to commodity accounts and commodity contracts
held by any Credit Party, whereby, among other things, the issuer, securities
intermediary or futures commission merchant disclaims any security interest in
the applicable financial assets, acknowledges the Lien of Administrative Agent,
on behalf of itself and Lenders, on such financial assets, and agrees to follow
the instructions or entitlement orders of Administrative Agent without further
consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
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"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Administrative Agent, on behalf of itself and
Lenders, by each applicable Credit Party.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any similar office or agency of the United
States, any state or territory thereof, or any other country or any political
subdivision thereof, and (b) all reissues, extensions or renewals thereof.
"Credit Parties" means Borrower and its Subsidiaries other than
Darling International, Ltd and Insurance Company of Colorado, Inc.
"Darling Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Borrower in favor of Administrative Agent, on behalf of
itself and Lenders.I
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Deposit Account" means any "deposit account," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrower and
denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documents" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$"means lawful currency of the United States of
America.
"EBITDA" means, with respect to any fiscal period, Borrower's and its
Subsidiaries' net income (loss) after taxes for such period (excluding any
after-tax gains or losses on sale of assets other than the sale of Inventory in
the ordinary course of business and excluding other after-tax extraordinary
gains or losses); plus Interest Expense, income and franchise tax expense,
depreciation and amortization for such period, in each case, to the extent
deducted in determining net income for such period; plus (or minus) any other
non-cash charges or gains which have been subtracted or added in calculating net
income after taxes for such period, all on a consolidated basis and in
accordance with GAAP.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
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interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42
U.S.C.ss.ss.9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C.ss.ss.5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.ss.136 et seq.); the
Solid Waste Disposal Act (42 ▇.▇.▇.▇▇.▇▇. 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C.ss.ss.2601 et seq.); the Clean Air Act (42
U.S.C.ss.ss.7401 et seq.); the Federal Water Pollution Control Act (33
U.S.C.ss.ss.1251 et seq.); the Occupational Safety and Health Act (29
U.S.C.ss.ss.651 et seq.); and the Safe Drinking Water Act (42 ▇.▇.▇.▇▇.▇▇.
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan, excluding, however, such events as to which PBGC has by
regulation waived the requirement of Section 4043(c) of ERISA; (b) the
withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial
withdrawal of any Credit Party or any ERISA Affiliate from any Multiemployer
Plan; (d) the filing of a notice of intent to terminate a Title IV Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (e)
the institution of proceedings to terminate a Title IV Plan or Multiemployer
Plan by the PBGC; (f) the failure by any Credit Party or ERISA Affiliate to make
when due required contributions to a Multiemployer Plan or Title IV Plan unless
such failure is cured within 30 days; (g) any other event or condition that
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Title
IV Plan or Multiemployer Plan or for the imposition of liability under Section
4069 or 4212(c) of ERISA; (h) the termination of a Multiemployer Plan under
Section 4041A of ERISA or the reorganization or insolvency of a Multiemployer
Plan under Section 4241 or 4245 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status; or (j) the termination of a Plan described
in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Cash Flow" means, without duplication, with respect to any
Fiscal Year of Borrower, consolidated net income plus (a) depreciation,
amortization and Interest Expense to the extent deducted in determining
consolidated net income, minus (b) Capital Expenditures during such Fiscal Year
(excluding the financed portion), minus (c) Interest Expense paid or accrued
(excluding any original issue discount, interest paid in kind or amortized debt
discount, to the extent included in determining Interest Expense) and scheduled
principal payments paid or payable in respect of Indebtedness, plus or minus (as
the case may be), minus (d) extraordinary gains or losses which are cash items
not included in the calculation of net income, minus (e) mandatory prepayments
paid in cash pursuant to Section 1.3 other than mandatory prepayments made
pursuant to Sections 1.3(b)(i), 1.3(b)(iii), or 1.3(d), plus (f) Taxes deducted
in determining consolidated net income to the extent not paid for in cash.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C.ss.201 et seq.
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"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Administrative Agent in
its sole discretion, which determination shall be final, binding and conclusive
(absent manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to any Agent or Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in
Annex G.
"Financial Statements" means the consolidated and consolidating
income statements, statements of cash flows and balance sheets of Borrower
delivered in accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the "monthly" accounting periods of
Borrower.
"Fiscal Quarter" means each of the four periods falling in each
Fiscal Year, each such period being thirteen or fourteen weeks in duration, as
applicable, with the first such period in any Fiscal Year beginning on the first
day of such Fiscal Year and the last such period in any Fiscal Year ending on
the last Saturday closest to December 31st.
"Fiscal Year" means the fifty-two or fifty-three week period, as the
case may be, beginning on the date which is one day after the date of the end of
the similar preceding period and ending on the Saturday closest to December
31st.
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period but, specifically excluding interest expense capitalized on Borrower's
balance sheet, plus (b) scheduled payments of principal with respect to
Indebtedness during such period, plus (c) cash taxes paid during such period,
plus (d) the amount of any payment made during such period arising under any
Seller Obligations.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of EBITDA minus Maintenance CAPEX to Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section 1.15(d).
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
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lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations (but
specifically excluding obligations of Borrower arising under operating leases),
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrower, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in Annex
G to the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" means that certain letter, dated as of
January 23, 2004, between GE Capital and Borrower with respect to certain Fees
to be paid from time to time by Borrower to GE Capital.
"General Intangibles" means all "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, including embedded software.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Guaranteed Indebtedness" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means any guaranty executed by any Guarantor in favor of
Administrative Agent and Lenders in respect of the Obligations.
"Guarantors" means each Subsidiary of Borrower who is a Credit Party
and each other Person who executes a guaranty or other similar agreement in
favor of Administrative Agent, for itself and the ratable benefit of Lenders, in
connection with the transactions contemplated by the Agreement and the other
Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Hedging Agreement" means any present or future, whether master or
single, agreement, document or instrument providing for, or constituting an
agreement to enter into, an interest-rate, basis, credit default or commodity
swap, forward-rate arrangement, commodity option, equity or equity-index swap or
option, bond or interest-rate option, forward-foreign-exchange arrangement,
rate-cap, rate-collar or rate-floor arrangement, currency or cross-currency-swap
arrangement, swaption, currency-option, or any similar arrangement
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred 6 months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than 6 months
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unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) Hedge Agreements, (g) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (h) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.13.
"Indemnified Person" has the meaning ascribed to in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if The Wall Street Journal ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Initial Mortgages" means those certain Mortgages to be executed and
delivered pursuant to the Post Closing Requirements, by Borrower to
Administrative Agent, for its benefit and the benefit of Lenders, each in form
and substance reasonably satisfactory to Administrative Agent and its counsel
(including local counsel).
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all notes and other, without limitation, evidences of indebtedness,
other than instruments that constitute, or are a part of a group of writings
that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
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"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan, the
first Business Day of each calendar quarter to occur while such Loan is
outstanding, and (b) as to any LIBOR Loan, the last day of the applicable LIBOR
Period; provided that, in addition to the foregoing, each of (x) the date upon
which all of the Commitments have been terminated and the Loans have been paid
in full and (y) the Commitment Termination Date shall be deemed to be an
"Interest Payment Date" with respect to any interest that has then accrued under
the Agreement.
"Inventory" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other supplies
and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986, as amended, and all
regulations promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall assign all or any portion
of the Obligations, such term shall include any assignee of such Lender, and any
party who becomes a Lender pursuant to Section 1.19.
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"Letter of Credit Additional Documentation" means such additional
documentation as may be reasonably requested by the L/C Issuer, from time to
time, in connection with the issuance of Letters of Credit and Borrower's
repayment of Letter of Credit Obligations.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Revolving Credit Agent and Lenders at the request of Borrower,
whether direct or indirect, contingent or otherwise, due or not due, in
connection with the issuance of Letters of Credit by Revolving Credit Agent or
another L/C Issuer or the purchase of a participation as set forth in Annex B
with respect to any Letter of Credit. The amount of such Letter of Credit
Obligations shall equal the maximum amount that may be payable at such time or
at any time thereafter by Revolving Credit Agent or Lenders thereupon or
pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of Borrower by any L/C Issuer, and bankers' acceptances
issued by Borrower, for which Revolving Credit Agent and Lenders have incurred
Letter of Credit Obligations.
"Leverage Ratio" means, with respect to Borrower, on a consolidated
basis, the ratio of (a) Funded Debt as of any date of determination to (b)
EBITDA for the twelve month period ending on (i) such date of determination if
such date is the last day of a Fiscal Month, and (ii) the last day of the
immediately preceding Fiscal Month if such date of determination is not the last
day of a Fiscal Month.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrower's irrevocable notice to Agents as set forth in Section 1.5(e);
provided, that the foregoing provision relating to LIBOR Periods is subject to
the following:
(a) if any LIBOR Period would otherwise end on a day that
is not a LIBOR Business Day, such LIBOR Period shall be extended to
the next succeeding LIBOR Business Day unless the result of such
extension would be to carry such LIBOR Period into another calendar
month in which event such LIBOR Period shall end on the immediately
preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond
the Commitment Termination Date shall end 2 LIBOR Business Days prior
to such date;
(c) any LIBOR Period that begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no
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numerically corresponding day in the calendar month at the end of
such LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month;
(d) Borrower shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR
Period for such Loan; and
(e) Borrower shall select LIBOR Periods so that there
shall be no more than 10 separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars
for the applicable LIBOR Period that appears on Telerate Page 3750 as
of 11:00 a.m. (London time), on the second full LIBOR Business Day
next preceding the first day of such LIBOR Period (unless such date
is not a Business Day, in which event the next succeeding Business
Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day that is 2 LIBOR Business
Days prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations
of the Federal Reserve Board or other Governmental Authority having
jurisdiction with respect thereto, as now and from time to time in
effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve
Board that are required to be maintained by a member bank of the
Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Administrative
Agent and Borrower.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
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"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Letter of Credit Additional Documentation and all other
agreements, instruments, documents and certificates identified in the Closing
Checklist executed and delivered to, or in favor of, any Agent or Lender and
including all other pledges, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any Responsible
Officer of any Credit Party, and delivered to any Agent or Lender in connection
with the Agreement or the transactions contemplated thereby. Any reference in
the Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loans" means the Revolving Loan and the Term Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Maintenance CAPEX" means Capital Expenditures made in any period for
the ongoing day-to-day business operations of Borrower or any of its
Subsidiaries (as opposed to the expansion or growth of Borrower's or any of its
Subsidiaries' operations), but specifically excluding Capital Expenditures in
any Fiscal Year in an amount equal to the lesser of (i) $5,000,000 and (ii)
Capital Expenditures incurred for or in connection with (A) obtaining,
maintaining or complying with any requirement of any Person for Borrower or any
of its Subsidiaries to maintain any permit, including Environmental Permits, or
to comply with any law, rule, order, statute, regulation or requirement of any
Governmental Authority and (B) the exercise of any purchase option under lease
of Equipment.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Credit Parties considered as a whole, (b) Borrower's or the Credit Parties'
(taken as a whole) ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement, (c) the Collateral or
Administrative Agent's Liens, on behalf of itself and Lenders, on the Collateral
or the priority of such Liens, or (d) any Agent's or Lender's rights and
remedies under the Agreement and the other Loan Documents.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"Mortgagee Property" has the meaning assigned to it in Section 5.9.
"Mortgages" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignment of leases or other
real estate security documents (including the Initial Mortgages) delivered by
any Credit Party to Administrative Agent on behalf of itself and the Lenders
with respect to the Mortgaged Properties, all in form and substance satisfactory
to Administrative Agent.
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"Motor Vehicle Laws" means all Federal (including, the federal
government of Canada), state, provincial and local laws, regulations, rules and
judicial or agency determinations and orders applicable to the ownership and/or
operation of vehicles (including, without limitation, the Rolling Stock), or the
business of the transportation of goods by motor vehicle, including, without
limitation, laws, regulations, rules and judicial or agency determinations and
orders promulgated or administered by the Federal Highway Administration, the
Federal Motor Carrier Safety Administration, the National Highway Traffic Safety
Administration, the Surface Transportation Board and other state, provincial and
local Governmental Authorities with respect to vehicle safety and registration
and motor carrier insurance, financial assurance, credit extension, contract
carriage, tariff and reporting requirements.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Negative Pledge" shall mean any negative pledge or other document
prohibiting any Credit Party form otherwise transferring, disposing or selling
any Real Estate owned by such Credit Party, which is in recordable form and
delivered by any Credit Party to Administrative Agent on behalf itself and
Lenders in form and substance satisfactory to Administrative Agent.
"Net Cash Proceeds" means (a) with respect to any asset disposition
or event giving rise to the receipt of insurance or condemnation proceeds, all
cash and Cash Equivalents received in connection with such asset disposition
(including any cash or Cash Equivalents received by way of deferred payment
pursuant to a note receivable or otherwise, but only as and when so received)
net of (i) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable in
connection therewith (in each case, paid to non-Affiliates), (ii) transfer
taxes, (iii) amounts payable to holders of senior Liens (to the extent such
Liens constitute Permitted Encumbrances hereunder) if any, and (iv) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith, and (b) with respect to the issuance of Stock, all cash and Cash
Equivalents received in connection with such sale net of investment banking
fees, underwriting discounts and commissions and other reasonable out- of-pocket
expenses and other customary expenses (in each case, paid to non-Affiliates)
incurred in connection with such sale.
"Net Worth" means, with respect to any Person as of any date of
determination, the book value of the assets of such Person, minus the sum of (a)
reserves applicable thereto, (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP, and (c) adjustments relating to FAS 133 and
87 and any amendment or successor rules thereto.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Note Purchase Agreement" means that certain Note Purchase Agreement
by and among Darling International Inc., and the purchasers party thereto dated
as of December 31, 2003.
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"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a)(i).
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to any Agent or Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees, reimbursement and cash
collateral obligations of any Credit Party to Revolving Credit Agent and any
other sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements
made in favor of Administrative Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section
6.1.
"Permitted Dividend Payment" means (a) the payment of dividends on
the Stock of Borrower by Borrower, in cash or in kind and/or (b) the redemption,
purchase or retirement of the Stock of Borrower by Borrower, in an aggregate
amount not to exceed 25% of Excess Cash Flow in any Fiscal Year and which may be
paid only during the period beginning on the date on which Administrative Agent
receives Borrower's annual audited financial statements for the immediately
preceding year pursuant to Annex E, and ending 60 days thereafter.
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"Permitted Encumbrances" has the meaning ascribed to it in Section
6.7.
"Permitted Equity Issuance" means the issuance of Stock in Borrower
and all options or other rights for purchase, acquisition or exchange of Stock
in Borrower, in each case issued to Borrower's officers, directors or employees
pursuant to incentive plans existing as of the date hereof and identified on
Disclosure Schedule 3.12 or as may exist as approved by the Borrower's
Stockholders from time to time.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
7 years on behalf of participants who are or were employed by any Credit Party
or ERISA Affiliate.
"Pledge Agreements" means, collectively, the Darling Pledge Agreement
and any pledge agreements entered into after the Closing Date by any Credit
Party (as required by the Agreement or any other Loan Document).
"Post Closing Requirements" has the meaning ascribed to it in Section
5.11.
"Preferred Stock" means the Series A Preferred Stock of Borrower.
"Prior Lender" means Credit Lyonnais New York Branch.
"Prior Lender Obligations" means all obligations owed to the Prior
Lender and certain other lenders pursuant to that certain Amended and Restated
Credit Agreement dated May 10, 2002, by and among Borrower, the Prior Lender and
the other parties signatory thereto.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral, (e) dividends, interest,
distributions and Instruments with respect to Investment Property and pledged
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Stock, and (f) any and all other amounts from time to time paid or payable under
or in connection with any of the Collateral, upon disposition or otherwise.
"Pro Forma" means the unaudited consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as of January 3, 2004 after
giving pro forma effect to the Related Transactions.
"Projections" means Borrower's forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements consistent with the historical
Financial Statements of the Borrower, together with appropriate supporting
details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any
Lender, (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, (b) with respect to the Term Loan(s),
the percentage obtained by dividing (i) the Term Loan Commitment of that Lender
by (ii) the aggregate Term Loan Commitments of all Lenders, (c) with respect to
all Loans, the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of all Lenders, and (d) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders, as any such percentages may be adjusted by
assignments permitted pursuant to Section 9.1.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from ▇▇▇▇▇'▇ at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrower
without the imposition of any withholding or similar taxes; provided that no
Person determined by Administrative Agent to be acting in the capacity of a
vulture fund or distressed debt purchaser shall be a Qualified Assignee, no
Person or Affiliate of such Person that is a direct business competitor with
Borrower or any other Credit Party shall be a Qualified Assignee, and no Person
or Affiliate of such Person (other than a Person that is already a Lender)
holding Subordinated Debt or Stock issued by any Credit Party shall be a
Qualified Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
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"Redemption Dividend" means the payment of not more than $1,100,000
within 10 days of the Closing Date for the redemption or repurchase of Preferred
Stock issued as dividends paid in kind to the holders of the Preferred Stock.
"Refinancing" means the repayment in full by Borrower of the Prior Lender
Obligations on the Closing Date.
"Related Transactions" means the initial borrowing under the
Revolving Loan and the Term Loan on the Closing Date, the Refinancing, the
payment of the Redemption Dividend and the payment of all fees, costs and
expenses associated with all of the foregoing and the execution and delivery of
all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents, the
Subordinated Documents and any amendments thereto, and all other agreements or
instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Requisite Lenders" means Lenders having (a) more than 50% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 50% of the aggregate outstanding amount of all Loans.
"Requisite Revolving Lenders" means Lenders having (a) more than 50%
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, more than 50% of the aggregate outstanding
amount of the Revolving Loan.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of a Credit Party and,
as to any document delivered on the Closing Date, any vice president or
secretary. Any document delivered hereunder that is signed by a Responsible
Officer shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of such Credit Party, and
such Responsible Officer shall be conclusively presumed to have acted on behalf
of such Credit Party.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
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Party now or hereafter outstanding; (e) any payment, loan, contribution, or
other transfer of funds or other property to any Stockholder of such Credit
Party other than payment of compensation in the ordinary course of business to
Stockholders who are employees of such Person; and (f) any payment of management
fees (or other fees of a similar nature) by such Credit Party to any Stockholder
of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Compliance Maximum" means an amount expressed in Dollars,
which if outstanding under the Revolving Loan would cause the Leverage Ratio, as
of any date of determination to be equal to 2.50 to 1.00; provided, however, if
the Leverage Ratio would be greater than 2.50 to 1.00 on such date with zero
outstanding on the Revolving Loan, then the Revolving Compliance Maximum shall
be zero Dollars.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Revolving Credit Agent" means Comerica in its capacity as revolving
credit agent for the Revolving Lenders or its successor appointed pursuant to
Section 9.7.
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the aggregate
commitment of such Lender to make Revolving Credit Advances or incur Letter of
Credit Obligations as set forth on Annex J to the Agreement or in the most
recent Assignment Agreement executed by such Lender and (b) as to all Lenders,
the aggregate commitment of all Lenders to make Revolving Credit Advances or
incur Letter of Credit Obligations, which aggregate commitment shall be Forty
Two Million Five Hundred Thousand Dollars ($42,500,000) on the Closing Date, as
such amount may be adjusted, if at all, from time to time in accordance with the
Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
"Rolling Stock" means Borrower's Equipment consisting of cars,
trucks, semi-trailers, tractors, service vehicles and automobiles.
"Route Swap" has the meaning ascribed to it in Section 6.8.
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"SEC" means the Securities and Exchange Commission, or any successor
thereto.
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Administrative Agent, on behalf of itself and
Lenders, and each Credit Party that is a signatory thereto.
"Seller Obligations" means any contingent obligation of Borrower
incurred in favor of a seller (or other party entitled thereto) under or with
respect to any non-compete agreement, Permitted Acquisition, or any similar
contingent obligation of Borrower incurred in favor of a seller with respect to
an acquisition completed prior to the Closing Date.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subordinated Debt" means the Indebtedness of Borrower evidenced by
the Subordinated Notes and the Note Purchase Agreement and any other
Indebtedness of any Credit Party subordinated to the Obligations in a manner and
form satisfactory to Administrative Agent and Lenders in their sole discretion,
as to right and time of payment and as to any other rights and remedies
thereunder.
"Subordinated Documents" means the Note Purchase Agreement, the
Subordinated Notes and such other agreements, documents and instruments as
create, evidence or secure any of the Subordinated Debt from time to time.
"Subordinated Notes" means those certain senior subordinated notes
due December 31, 2009, issued by Borrower in accordance with the Subordinated
Documents in an aggregate original principal amount of $35,000,000.
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"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
"Supporting Obligations" has the meaning ascribed thereto in the
Code.
"Tangible Net Worth" means, with respect to any Person at any date,
the Net Worth of such Person at such date, excluding, however, from the
determination of the total assets at such date, (a) all goodwill, capitalized
organizational expenses, capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other intangible items, (b) all unamortized debt
discount and expense, (c) treasury Stock, and (d) any write-up in the book value
of any asset resulting from a revaluation thereof.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings imposed by any Governmental Authority, and all liabilities with
respect thereto, excluding (a) taxes imposed on or measured by the net income of
an Agent, a Lender or an L/C Issuer (or any franchise taxes or similar taxes
imposed on such Agent, Lender or L/C Issuer, as the case may be) by the
jurisdictions under the laws of which such Agent, Lenders and L/C Issuers are
organized or conduct business or any political subdivision thereof and (b) any
United States withholding taxes payable with respect to payments hereunder or
under the Notes or any other Loan Document.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged (c) all Letter of
Credit Obligations have been cash collateralized, canceled or backed by standby
letters of credit in accordance with Annex B, and (d) none of Borrower shall
have any further right to borrow any monies under the Agreement.
"Term Lenders" means those Lenders having Term Loan Commitments.
"Term Loan" has the meaning assigned to it in Section 1.1(b)(i).
"Term Loan Commitment" means (a) as to any Lender with a Term Loan
Commitment, the commitment of such Lender to make its Pro Rata Share of the Term
Loan as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such Lender, and (b) as to all Lenders with a Term Loan
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Commitment, the aggregate commitment of all Lenders to make the Term Loan, which
aggregate commitment shall be Twenty-Five Million Dollars ($25,000,000) on the
Closing Date. After advancing the Term Loan, each reference to a Lender's Term
Loan Commitment shall refer to that Lender's Pro Rata Share of the outstanding
Term Loan.
"Term Note" has the meaning assigned to it in Section 1.1(b)(i).
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Administrative Agent, on behalf of Lenders, by each
applicable Credit Party.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of 5 years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"U.S. Lender" shall have the meaning ascribed thereto in Section
1.15(d).
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code as in
effect in the State of New York to the extent the same are used or defined
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therein. Unless otherwise specified, references in the Agreement or any of the
Appendices to a Section, subsection or clause refer to such Section, subsection
or clause as contained in the Agreement. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole,
including all Annexes, Exhibits and Schedules, as the same may from time to time
be amended, restated, modified or supplemented, and not to any particular
section, subsection or clause contained in the Agreement or any such Annex,
Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
Revolving Credit Agent and Revolving Lenders agree to incur, from time to time
prior to the Commitment Termination Date, upon the request of Borrower on behalf
of Borrower and for Borrower's account, Letter of Credit Obligations by causing
Letters of Credit to be issued by Revolving Credit Agent or an Affiliate thereof
(in such capacity, herein referred to as the "L/C Issuer") for Borrower's
account. The aggregate amount of all such Letter of Credit Obligations shall not
at any time exceed the lesser of (i) Twenty-Five Million Dollars ($25,000,000)
(the "L/C Sublimit") and (ii) the Maximum Amount less the aggregate outstanding
principal balance of the Revolving Loan. No such Letter of Credit shall have an
expiry date that is more than one year following the date of issuance thereof,
other than the back to back Letters of Credit issued on the Closing Date, unless
otherwise agreed by both Agents, in their sole discretion, and neither Revolving
Credit Agent nor Revolving Lenders shall be under any obligation to incur Letter
of Credit Obligations in respect of, or purchase risk participations in, any
Letter of Credit having an expiry date that is later than the Commitment
Termination Date; provided that a Letter of Credit may contain provisions
whereby its expiration is automatically extended for an additional one year
period unless the L/C Issuer provides notice to the beneficiary thereof that the
Letter of Credit will not be so extended; provided further, any such automatic
extension of such expiration period shall never be extended beyond April 2,
2009.
(b) (i) Advances Automatic; Participations. In the event that
Revolving Credit Agent or any Revolving Lender shall make any payment on or
pursuant to any Letter of Credit Obligation, the Revolving Credit Agent shall
give the Borrower notice thereof and if Borrower shall fail to make payment to
the Revolving Credit Agent for such Letter of Credit Obligations within one
Business Day after demand, such payment shall be deemed automatically to
constitute a Revolving Credit Advance to Borrower under Section 1.1(a) of the
Agreement regardless of whether an Event of Default has occurred and is
continuing and notwithstanding Borrower's failure to satisfy the conditions
precedent set forth in Section 2, and each Revolving Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Revolving Lender to make available to Revolving Credit Agent for
Revolving Credit Agent's own account its Pro Rata Share of any such Revolving
Credit Advance or payment by Revolving Credit Agent under or in respect of a
Letter of Credit shall not relieve any other Revolving Lender of its obligation
hereunder to make available to Revolving Credit Agent its Pro Rata Share
thereof, but no Revolving Lender shall be responsible for the failure of any
other Revolving Lender to make available such other Revolving Lender's Pro Rata
Share of any such payment.
(ii) If it shall be illegal or unlawful for Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default described in Sections 8.1(h) or (i) or otherwise or if it
shall be illegal or unlawful for any Revolving Lender to be deemed to have
assumed a ratable share of the reimbursement obligations owed to an L/C Issuer,
B-1
or if the L/C Issuer is a Revolving Lender, then (A) immediately and without
further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Revolving Credit Agent (or such
L/C Issuer, as the case may be) an undivided interest and participation equal to
such Revolving Lender's Pro Rata Share (based on the Revolving Loan Commitments)
of the Letter of Credit Obligations in respect of all Letters of Credit then
outstanding and (B) thereafter, immediately upon issuance of any Letter of
Credit, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Revolving Credit Agent (or such L/C Issuer, as
the case may be) an undivided interest and participation in such Revolving
Lender's Pro Rata Share (based on the Revolving Loan Commitments) of the Letter
of Credit Obligations with respect to such Letter of Credit on the date of such
issuance. Each Revolving Lender shall fund its participation in all payments or
disbursements made under the Letters of Credit in the same manner as provided in
the Agreement with respect to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrower is required to provide cash collateral for any Letter
of Credit Obligations pursuant to the Agreement prior to the Commitment
Termination Date, Borrower will pay to Revolving Credit Agent for the ratable
benefit of itself and Revolving Lenders cash or Cash Equivalents in an amount
equal to 105% of the maximum amount then available to be drawn under each
applicable Letter of Credit outstanding for the benefit of Borrower. Such funds
or Cash Equivalents shall be held by Revolving Credit Agent in a cash collateral
account (the "Cash Collateral Account") maintained at Revolving Credit Agent.
The Cash Collateral Account shall be in the name of Borrower and shall be
pledged to, and subject to the control of, Administrative Agent and Revolving
Credit Agent, for the benefit of Agents and Lenders, in a manner reasonably
satisfactory to Agents. Borrower hereby pledges and grants to Agents, on behalf
of themselves and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination Date,
Borrower shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit, if any, to be canceled
and returned, or (C) deliver a stand-by letter (or letters) of credit in
guaranty of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus 30 additional days)
as, and in an amount equal to 105% of, the aggregate maximum amount then
available to be drawn under, the Letters of Credit to which such outstanding
Letter of Credit Obligations relate and shall be issued by a Person, and shall
be subject to such terms and conditions, as are satisfactory to Agents in their
reasonable discretion.
(iii) After funds are deposited in the Cash Collateral Account by
Borrower, whether before or after the Commitment Termination Date, and upon the
occurrence and during the continuance of an Event of Default, Agents may apply
such funds or Cash Equivalents then held in the Cash Collateral Account to the
B-2
payment of any amounts, and in such order as Agents may elect, as shall be or
shall become due and payable by Borrower to Agents and Lenders with respect to
such Letter of Credit Obligations of Borrower and, upon the satisfaction in full
of all Letter of Credit Obligations of Borrower, to any other Obligations of
Borrower then due and payable.
(iv) Neither Borrower nor any Person claiming on behalf of or through
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrower
to Agents and Lenders in respect thereof, any funds remaining in the Cash
Collateral Account shall be applied to other Obligations then due and owing and
upon payment in full of such Obligations, any remaining amount shall be paid to
Borrower or as otherwise required by law. Interest earned on deposits in the
Cash Collateral Account shall be for the account of Revolving Credit Agent.
(d) Fees and Expenses. Borrower agrees to pay to Revolving Credit
Agent for the benefit of Revolving Lenders, as compensation to such Lenders for
Letter of Credit Obligations incurred hereunder, (i) all costs and expenses
incurred by Revolving Credit Agent or any L/C Issuer on account of such Letter
of Credit Obligations, and (ii) for each month during which any Letter of Credit
Obligation shall remain outstanding, a fee (the "Letter of Credit Fee") in an
amount equal to the Applicable L/C Margin from time to time in effect as set
forth in Section 1.5 multiplied by the maximum amount available from time to
time to be drawn under the applicable Letter of Credit. Such fee shall be paid
to Revolving Credit Agent for the benefit of the Revolving Lenders in arrears,
on the first day of each month and on the Commitment Termination Date. In
addition, Borrower shall pay to any L/C Issuer, on demand, such fees (including
all per annum fees), charges and expenses of such L/C Issuer in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
shall give Revolving Credit Agent at least 2 Business Days' prior written notice
requesting the incurrence of any Letter of Credit Obligation. The notice shall
be accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and such Letter of Credit Additional Documentation as the L/C
Issuer shall reasonably request. Notwithstanding anything contained herein to
the contrary, Letter of Credit applications by Borrower and approvals by
Revolving Credit Agent and the L/C Issuer may be made and transmitted pursuant
to electronic codes and security measures mutually agreed upon and established
by and among Borrower, Revolving Credit Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrower to reimburse
Revolving Credit Agent and Revolving Lenders for payments made with respect to
any Letter of Credit Obligation shall be absolute, unconditional and
irrevocable, without necessity of presentment, demand, protest or other
formalities, and the obligations of each Revolving Lender to make payments to
Revolving Credit Agent with respect to Letters of Credit shall be unconditional
B-3
and irrevocable. Such obligations of Borrower and Revolving Lenders shall be
paid strictly in accordance with the terms hereof under all circumstances
including the following:
(i) any lack of validity or enforceability of any
Letter of Credit or the Agreement or the other Loan
Documents or any other agreement;
(ii) the existence of any claim, setoff, defense
or other right that Borrower or any of its respective
Affiliates or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or
any Persons or entities for whom any such transferee may be
acting), any Agent, any Lender, or any other Person,
whether in connection with the Agreement, the Letter of
Credit, the transactions contemplated herein or therein or
any unrelated transaction (including any underlying
transaction between Borrower or any of its respective
Affiliates and the beneficiary for which the Letter of
Credit was procured);
(iii) any draft, demand, certificate or any other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by Revolving Credit Agent (except as
otherwise expressly provided in paragraph (g)(ii)(C) below)
or any L/C Issuer under any Letter of Credit against
presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter
of Credit;
(v) any other circumstance or event whatsoever,
that is similar to any of the foregoing; or
(vi) the fact that a Default or an Event of
Default has occurred and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, Borrower hereby agrees to pay and to protect, indemnify, and save
harmless each Agent and each Lender from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and out-of-pocket expenses
(including reasonable attorneys' fees and allocated costs of internal counsel)
that any Agent or Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit, or (B) the failure of any
Agent or Lender seeking indemnification or of any L/C Issuer to honor a demand
for payment under any Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or Governmental Authority, in each case other than to the extent
solely as a result of the gross negligence or willful misconduct of such Agent
or Lender (as finally determined by a court of competent jurisdiction).
(ii) As between any Agent and any Lender and Borrower, Borrower
assumes all risks of the acts and omissions of, or misuse of any Letter of
Credit by beneficiaries, of any Letter of Credit; provided that this assumption
is not intended to and shall not preclude Borrower from pursuing such rights and
B-4
remedies as it may have against the beneficiary at law or under any other
agreement. In furtherance and not in limitation of the foregoing, to the fullest
extent permitted by law, neither Agents nor any Lender shall be responsible for:
(A) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) failure of the beneficiary of any
Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; provided, that in the case of any payment
by Revolving Credit Agent under any Letter of Credit or guaranty thereof,
Revolving Credit Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the demand
for payment under such Letter of Credit complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit; (D) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they may be in
cipher; (E) errors in interpretation of technical terms; (F) any loss or delay
in the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or of the proceeds thereof; (G) the credit of
the proceeds of any drawing under any Letter of Credit; and (H) any consequences
arising from causes beyond the control of any Agent or Lender. None of the above
shall affect, impair, or prevent the vesting of any of Agents' or any Lender's
rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrower in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among Borrower and such L/C Issuer,
including all Letter of Credit Additional Documentation which exist from time to
time.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Borrower and each Credit Party shall establish and maintain the Cash
Management Systems described below:
(a) Within 60 days of the Closing Date and until the Termination
Date, Borrower and each Credit Party shall (i) establish lock boxes ("Lock
Boxes") or at Administrative Agent's discretion, blocked accounts ("Blocked
Accounts") at Comerica, and shall request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
such Lock Boxes, (ii) deposit or cause to be deposited promptly, and in any
event no later than the second Business Day after the date of receipt thereof,
all cash, checks, drafts or other similar items of payment relating to or
constituting payments made in respect of any and all Collateral (whether or not
otherwise delivered to a Lock Box) into one or more Blocked Accounts in
Borrower's name or any Credit Party's name at Comerica (the "Relationship Bank")
and (iii) take such actions as are necessary to establish and maintain all of
its accounts, including but not limited to investment, deposit and disbursement
accounts with the Relationship Bank. Further, Borrower and/or any Credit Party
shall not establish any account with any bank other than Relationship Bank. On
or before the Closing Date, Borrower and each Credit Party shall have
established a concentration account in its name (each a "Concentration Account"
and collectively, the "Concentration Accounts") at the bank or banks that shall
be designated as the Concentration as the Concentration Account bank for each
such Borrower or Credit Party in Disclosure Schedule 3.19 (each a "Concentration
Account Bank" and collectively, the "Concentration Account Banks"), which banks
shall be reasonably satisfactory to Administrative Agent.
(b) Borrower and each Credit Party may maintain, in its name, an
account (each a "Disbursement Account" and collectively, the "Disbursement
Accounts") at a bank reasonably acceptable to Administrative Agent into which
Administrative Agent shall, from time to time, deposit proceeds of Revolving
Credit Advances made to Borrower pursuant to Section 1.1 for use by Borrower
solely in accordance with the provisions of Section 1.4.
(c) Notwithstanding the forgoing, the Credit Parties may establish
and maintain bank accounts for the sole purpose of (i) funding payroll
obligations of the Credit Parties ("Payroll Accounts"), (ii) funding tax
obligations of the Credit Parties ("Tax Accounts") and (iii) holding funds owned
by Persons other than any Credit Party ("Trust Fund Accounts"), and no such
Payroll Accounts, Tax Accounts or Trust Fund Accounts shall be required to be
subject to a blocked account agreement. The Credit Parties shall give
Administrative Agent prior written notice before establishing any Payroll
Account, Tax Account or Trust Fund Account.
C-1
(d) On or before the Closing Date (or such later date as
Administrative Agent shall consent to in writing), each Concentration Account
Bank, each bank where a Disbursement Account is maintained and all other
Relationship Banks, shall have entered into tri-party blocked account agreements
or Control Letters with Administrative Agent (or Borrower shall have delivered
such other evidence of direction of funds with respect thereto as is acceptable
to Agent in its sole discretion), for the benefit of itself and Lenders, and the
applicable Credit Party, in form and substance reasonably acceptable to
Administrative Agent, which shall become operative on or prior to the Closing
Date. Each such blocked account agreement or Control Letter shall provide, among
other things, that (i) all items of payment deposited in such account and
proceeds thereof deposited in the applicable Concentration Account are held by
such bank as agent or bailee-in-possession for Administrative Agent, on behalf
of itself and Lenders, (ii) the bank executing such agreement has no rights of
setoff or recoupment or any other claim against such account, as the case may
be, other than for payment of its service fees and other charges directly
related to the administration of such account and for returned checks or other
items of payment, and (iii) from and after the Closing Date (A) with respect to
banks at which a Blocked Account is maintained, such bank agrees, from and after
the receipt of a notice (an "Activation Notice") from Administrative Agent
(which Activation Notice may be given by Administrative Agent at any time at
which an Event of Default has occurred and is continuing, to forward immediately
all amounts in each Blocked Account to such Borrower's Concentration Account
Bank and to commence the process of daily sweeps from such Blocked Account into
the applicable Concentration Account and (B) with respect to each Concentration
Account Bank, such bank agrees from and after the receipt of an Activation
Notice from Administrative Agent upon the occurrence of an Event of Default, to
immediately forward all amounts received in the applicable Concentration Account
to the Collection Account through daily sweeps from such Concentration Account
into the Collection Account; provided, that to the extent any amounts so
received into the Collection Account include amounts which represent the payment
of local and/or state sales taxes or export duties, the failure of which to
remit to the applicable taxing authority would be likely to result in criminal
and/or personal liability of the officers, directors or employees of Borrower,
Administrative Agent will provide such funds which represent such sales taxes or
export duties to Borrower for the sole purpose of remittance of such sales taxes
or export duties to the applicable taxing authority. From and after the date
Administrative Agent has delivered an Activation Notice to any bank with respect
to any Blocked Account(s), no Credit Party shall accumulate or maintain cash in
Disbursement Accounts, Payroll Accounts or Tax Accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements. At such time as
the Event of Default which gave rise for the delivery of the Activation Notice
shall have terminated or no longer be in effect (as determined by Administrative
Agent in its reasonable discretion), and so long as no other Event of Default
then exists, Agent shall, at the written request of Borrower, terminate the
Activation Notice then in place.
(e) So long as no Event of Default has occurred and is continuing,
Borrower may amend Disclosure Schedule 3.19 to add or replace a Relationship
Bank, Lock Box or Blocked Account or to replace any Concentration Account or any
Disbursement Account; provided, that prior to the time of the opening of such
account or Lock Box (other than any Tax Account, Trust Fund Account or Payroll
Account), the applicable Credit Party and such bank shall have executed and
delivered to Administrative Agent a tri-party blocked account agreement, in form
C-2
and substance reasonably satisfactory to Administrative Agent. Borrower shall
close any of its accounts (and establish replacement accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days (or such later
date as Administrative Agent shall consent to in writing) following notice from
Administrative Agent that the creditworthiness of any bank holding an account is
no longer acceptable in Administrative Agent's reasonable judgment, or as
promptly as practicable and in any event within 60 days (or such later date as
Administrative Agent shall consent to in writing) following notice from
Administrative Agent that the operating performance, funds transfer or
availability procedures or performance with respect to accounts or Lock Boxes of
the bank holding such accounts or Administrative Agent's liability under any
tri-party blocked account agreement with such bank is no longer acceptable in
Administrative Agent's reasonable judgment.
(f) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Accounts shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which each Credit Party shall have
granted a Lien to Administrative Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(g) All amounts deposited in the Collection Account shall be deemed
received by Administrative Agent in accordance with Section 1.10 and shall be
applied (and allocated) by Administrative Agent in accordance with Section 1.11.
In no event shall any amount be so applied unless and until such amount shall
have been credited in immediately available funds to the Collection Account.
(h) Borrower and each Credit Party shall and shall cause its
Affiliates, officers, employees, agents, directors or other Persons acting for
or in concert with Borrower (each a "Related Person") to (i) hold in trust for
Administrative Agent, for the benefit of itself and Lenders, all checks, cash
and other items of payment received by such Borrower or any such Related Person,
and (ii) within 2 Business Days after receipt by Borrower or any such Related
Person of any checks, cash or other items of payment, deposit the same into a
Blocked Account of Borrower. Borrower, each Credit Party and each Related Person
thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral. All proceeds of
the sale or other disposition of any Collateral, shall be deposited directly
into the applicable Blocked Accounts.
C-3
ANNEX D (SECTION 2.1(A))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Administrative Agent in form and substance satisfactory to
Administrative Agent on or prior to the Closing Date, unless otherwise agreed
and consented to in writing by Administrative Agent (each capitalized term used
but not otherwise defined herein shall have the meaning ascribed thereto in
Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Administrative Agent.
B. Revolving Notes and Term Notes. Duly executed originals of the
Revolving Notes, and Term Notes for each applicable Lender, dated the Closing
Date.
C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, and all instruments, documents and agreements
executed pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Administrative Agent, in favor of Administrative Agent, on
behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Administrative Agent that Administrative
Agent (for the benefit of itself and Lenders) has a valid and perfected first
priority security interest in the Collateral, including but not limited to (i)
such documents duly executed by each Credit Party (including financing
statements under the Code and other applicable documents under the laws of any
jurisdiction with respect to the perfection of Liens) as Administrative Agent
may request in order to perfect its security interests in the Collateral and
(ii) copies of Code search reports listing all effective financing statements
that name any Credit Party as debtor, together with copies of such financing
statements, none of which shall cover the Collateral, except for those relating
to the Prior Lender Obligations (all of which shall be terminated on the Closing
Date) and Permitted Encumbrances.
(b) Evidence satisfactory to Administrative Agent, including copies,
of all UCC-1 and other financing statements filed in favor of any Credit Party
with respect to each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities
and financial assets held by Borrower, (ii) all securities intermediaries with
D-1
respect to all securities accounts and securities entitlements of Borrower and
each Credit Party, and (iii) all futures commission agents and clearing houses
with respect to all commodities contracts and commodities accounts held by
Borrower.
(d) Borrower shall have delivered or caused to be delivered to
Administrative Agent or its designee, all original vehicle titles pertaining to
the Rolling Stock which are in Borrower's, Prior Lender's, or Prior Lender's
designee's possession, together with an original power of attorney executed by
Prior Lender, in form and content satisfactory to Administrative Agent, which
permits Administrative Agent or Administrative Agent's designee to release all
of Prior Lender's Liens on the Rolling Stock.
(e) Borrower shall have delivered or caused to be delivered to
Administrative Agent evidence of the release of all Liens on any assets of any
Credit Party other than Permitted Encumbrances.
F. Payoff Letter; Termination Statements. Copies of a duly executed
payoff letter, in form and substance reasonably satisfactory to Administrative
Agent, by and between all parties to the Prior Lender loan documents evidencing
repayment in full of all Prior Lender Obligations, together with (a) UCC-3 or
other appropriate termination statements, in form and substance satisfactory to
Administrative Agent, manually signed by the Prior Lender releasing all liens of
Prior Lender upon any of the personal property of each Credit Party, and (b)
termination of all blocked account agreements, bank agency agreements or other
similar agreements or arrangements or arrangements in favor of Prior Lender or
relating to the Prior Lender Obligations, or, in Agents discretion,
modifications of any such agreements or arrangements to reference this Agreement
and Administrative Agent as the secured party or assignee thereunder and to
delete all references therein to Prior Lender.
G. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Closing Date and signed by each Credit Party
which owns Trademarks, Copyrights and/or Patents, as applicable, all in form and
substance reasonably satisfactory to Administrative Agent, together with all
instruments, documents and agreements executed pursuant thereto.
H. Initial Notice of Revolving Credit Advance. Duly executed
originals of a Notice of Revolving Credit Advance, dated the Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower on
the Closing Date.
I. Letter of Direction. Duly executed originals of a letter of
direction from Borrower addressed to Administrative Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the Term Loan and the initial Revolving Credit Advance.
J. Cash Management System; Blocked Account Agreements; Control
Letters/Agreement. Evidence satisfactory to Administrative Agent that, as of the
Closing Date, or within such other time period as provided in this Agreement,
(i) Cash Management Systems complying with Annex C to the Agreement have been
D-2
established and are currently being maintained in the manner set forth in such
Annex C, (ii) copies of duly executed tri-party blocked account and lock box
agreements, reasonably satisfactory to Administrative Agent, with the banks as
required by Annex C, (iii) control letters and/or agreements executed by each
depository institution which holds or maintains any deposit account of the
Borrower with respect to each such accounts, other than Payroll Accounts, Tax
Accounts and Trust Fund Accounts.
K. Charter and Good Standing. For each Credit Party, such Person's
(a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation and (c)
good standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, each dated a recent date prior to the Closing Date and certified
by the applicable Secretary of State or other authorized Governmental Authority.
L. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors and stockholders, approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and the transactions to be consummated in connection therewith, each
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any modification
or amendment.
M. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
N. Opinions of Counsel. Duly executed originals of opinions of Weil,
Gotshal & ▇▇▇▇▇▇ LLP, counsel for the Credit Parties, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, dated the
Closing Date, and to include in such opinion an express statement to the effect
that Administrative Agent and Lenders are authorized to rely on such opinion.
O. Pledge Agreements. Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable) (a) share certificates representing
all of the outstanding Stock being pledged pursuant to such Pledge Agreement and
stock powers for such share certificates executed in blank and (b) the original
Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.
P. Subordinated Debt. Administrative Agent shall have received fully
executed copies of the Subordinated Documents.
Q. Accountants' Letters. A letter from the Credit Parties to their
independent auditors authorizing the independent certified public accountants of
the Credit Parties to communicate with Administrative Agent and Lenders in
accordance with Section 4.2.
D-3
R. Appointment of Administrative Agent for Service. An appointment of
CT Corporation as each Credit Party's agent for service of process.
S. Officer's Certificate. Administrative Agent shall have received
duly executed originals of a certificate of the Officer of Borrower, dated the
Closing Date, stating that, since January 3, 2003 (a) no event or condition has
occurred or is existing which could reasonably be expected to have a Material
Adverse Effect; (b) there has been no adverse change in the industry in which
Borrower operates which could reasonably be expected to have a Material Adverse
Effect; (c) no Litigation has been commenced which, if adversely determined,
would reasonably be expected to have a Material Adverse Effect or could
challenge any of the transactions contemplated by the Agreement and the other
Loan Documents; (d) there have been no Restricted Payments made by any Credit
Party; and (e) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of Borrower or any of its
Subsidiaries.
T. Waivers. Administrative Agent, on behalf of Lenders, shall have
received landlord waivers and consents, bailee letters and mortgagee agreements
in form and substance reasonably satisfactory to Administrative Agent, in each
case as required pursuant to Section 5.9.
U. Negative Pledges. Negative Pledges covering all of the Real Estate
together with evidence that such Negative Pledges have been recorded in all
places to the extent necessary or desirable, in the judgment of Administrative
Agent.
V. Audited Financials; Financial Condition. Administrative Agent
shall have received the Financial Statements, Projections and other materials
set forth in Section 3.4, certified by Borrower's Chief Financial Officer, in
each case in form and substance reasonably satisfactory to Administrative Agent,
and Administrative Agent shall be satisfied, in its sole discretion, with all of
the foregoing. Administrative Agent shall have further received a certificate of
the Chief Executive Officer and/or the Chief Financial Officer of Borrower,
based on such Pro Forma and Projections, to the effect that (a) Borrower will be
Solvent upon the consummation of the transactions contemplated herein; (b) the
Pro Forma fairly presents in all material respects the financial condition of
Borrower as of the date thereof after giving effect to the transactions
contemplated by the Loan Documents; and (c) the Projections are based upon
estimates and assumptions stated therein, all of which Borrower believes to be
reasonable and fair in light of current conditions and current facts known to
such Borrower and, as of the Closing Date, reflect Borrower's good faith and
reasonable estimates of its future financial performance and of the other
information projected therein for the period set forth therein (it being
understood that such Projections are not a guarantee of future performance and
actual results may differ).
W. Letter of Credit Additional Documentation. Such Letter of Credit
Additional Documentation as the L/C Issuer requests in connection with the
issuance of the initial Letters of Credit under this Agreement.
X. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Administrative Agent may, in its reasonable
discretion, request.
D-4
ANNEX E (SECTION 4.1(A))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Administrative
Agent or to Agents and Lenders, as indicated, the following:
(a) Monthly Financials. To Agents and Lenders, within 45 days after
the end of each Fiscal Month, financial information regarding Borrower and its
Subsidiaries, certified by the Chief Financial Officer of Borrower, consisting
of consolidated and consolidating (i) unaudited balance sheets as of the close
of such Fiscal Month and the related statements of income and cash flows for
that portion of the Fiscal Year ending as of the close of such Fiscal Month; and
(ii) unaudited statements of income and cash flows for such Fiscal Month,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (A) a statement
in reasonable detail, in the substantially the same for as set forth on Exhibit
E-1, (each, a "Compliance Certificate") showing the calculations used in
determining compliance with each Financial Covenant that is tested on a monthly
basis, and (B) the certification of the Chief Financial Officer of Borrower that
(i) such financial information presents fairly in accordance with GAAP (subject
to normal year-end adjustments) the financial position and results of operations
of Borrower and its Subsidiaries, on a consolidated and consolidating basis, in
each case as at the end of such Fiscal Month and for that portion of the Fiscal
Year then ended and (ii) any other information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default has
occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default.
(b) Quarterly Financials. To Agents and Lenders, within 48 days after
the end of each Fiscal Quarter, consolidated and consolidating financial
information regarding Borrower and its Subsidiaries, certified by the Chief
Financial Officer of Borrower, including (i) unaudited balance sheets as of the
close of such Fiscal Quarter and the related statements of income and cash flow
for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments). Such financial information shall be accompanied
by (A) a Compliance Certificate in respect of each of the Financial Covenants
that is tested on a quarterly basis and (B) the certification of the Chief
Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position, results of operations and statements of cash flows of
Borrower and its Subsidiaries, on both a consolidated and consolidating basis,
as at the end of such Fiscal Quarter and for that portion of the Fiscal Year
then ended, (ii) any other information presented is true, correct and complete
in all material respects and that there was no Default or Event of Default in
E-1
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default. In addition, Borrower shall deliver to Agents
and Lenders, within 48 days after the end of each Fiscal Quarter, a management
discussion and analysis that includes a comparison to budget for that Fiscal
Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) Operating Plan. To Agents and Lenders, as soon as available, but
not later than 30 days after the end of each Fiscal Year, an annual operating
plan for Borrower, on a consolidated and consolidating basis, approved by the
Board of Directors of Borrower, for the following Fiscal Year, which (i)
includes a statement of all of the material assumptions on which such plan is
based, (ii) includes monthly balance sheets, income statements and statements of
cash flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agents and Lenders, within 90 days
after the end of each Fiscal Year, audited Financial Statements for Borrower and
its Subsidiaries on a consolidated and (unaudited) consolidating basis,
consisting of balance sheets and statements of income and retained earnings and
cash flows, setting forth in comparative form in each case the figures for the
previous Fiscal Year, which Financial Statements shall be prepared in accordance
with GAAP and certified without qualification, by an independent certified
public accounting firm of national standing or otherwise acceptable to
Administrative Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that a
Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Administrative Agent, on behalf of itself
and Lenders, in form and substance reasonably satisfactory to Administrative
Agent and subject to standard qualifications required by nationally recognized
accounting firms, signed by such accounting firm acknowledging that Agents and
Lenders are entitled to rely upon such accounting firm's certification of such
audited Financial Statements, (iv) the annual letters to such accountants in
connection with their audit examination detailing contingent liabilities and
material litigation matters, and (v) the certification of the Chief Executive
Officer or Chief Financial Officer of Borrower that all such Financial
Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Borrower and its
Subsidiaries on a consolidated and consolidating basis, as at the end of such
Fiscal Year and for the period then ended, and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of
Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.
E-2
(e) Management Letters. To Agents and Lenders, within 5 Business Days
after receipt thereof by any Credit Party, copies of all management letters,
exception reports or similar letters or reports received by such Credit Party
from its independent certified public accountants.
(f) Default Notices. To Agents and Lenders, as soon as practicable,
and in any event within 5 Business Days after an executive officer of Borrower
has actual knowledge of the existence of any Default, Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agents and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the SEC or any governmental or private regulatory
authority; and (iii) all press releases and other statements made available by
any Credit Party to the public concerning material changes or developments in
the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Administrative Agent, as
soon as practicable, copies of all material written notices given or received by
any Credit Party with respect to any Subordinated Debt or Stock of such Person,
and, within 2 Business Days after any Credit Party obtains knowledge of any
matured or unmatured event of default with respect to any Subordinated Debt,
notice of such event of default.
(i) Supplemental Schedules. To Administrative Agent, supplemental
disclosures, if any, required by Section 5.6.
(j) Litigation. To Administrative Agent in writing, promptly upon
learning thereof, notice of any Litigation commenced or threatened against any
Credit Party that (i) would reasonably be expected to result in liability in
excess of $250,000 and is not covered by insurance, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan and would reasonably be expected to result in liability in excess of
$100,000, (iv) alleges criminal misconduct by any Credit Party which could
reasonably be expected to have a fine in excess of $50,000 or which constitutes
a felony, (v) alleges the violation of any law regarding, or seeks remedies in
connection with, any Environmental Liabilities in violation of the requirements
set forth in Section 5.8 or (vi) involves any product recall.
(k) Insurance Notices. To Administrative Agent, disclosure of losses
or casualties required by Section 5.4.
(l) Lease Default Notices. To Administrative Agent, within 2 Business
Days after receipt thereof, copies of (i) any and all default notices received
under or with respect to any leased location or public warehouse where
Collateral is located, and (ii) such other notices or documents as
E-3
Administrative Agent may reasonably request, in each case, for the properties
located in Irving, Texas, San Diego, California, San Francisco, California, Fort
Lauderdale, Florida, and Tacoma, Washington.
(m) Lease Amendments. To Administrative Agent, within 2 Business Days
after receipt thereof, copies of all material amendments to real estate leases
for the leased locations in Irving, Texas, San Diego, California, San Francisco,
California, Fort Lauderdale, Florida, and Tacoma, Washington..
(n) Other Documents. To Agents and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Administrative Agent shall from time to time reasonably request.
E-4
ANNEX F (SECTION 4.1(B))
TO
CREDIT AGREEMENT
INTENTIONALLY OMITTED FROM THE CREDIT AGREEMENT
-----------------------------------------------
F-1
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower shall not breach or fail to comply with any of the
following financial covenants, each of which shall
be calculated in accordance with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrower and its
Subsidiaries on a consolidated basis shall not make
Capital Expenditures during the following periods that exceed in the aggregate
the amounts set forth opposite each of such periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
The 12-month period ending
December 31, 2004 $13,650,000
The 12-month period ending
December 31, 2005 $14,332,500
The 12-month period ending
December 31, 2006 $15,049,125
The 12-month period ending
December 31, 2007 $15,801,581.
The 12-month period ending
December 31, 2008 $16,591,660
The 12-month period ending
December 31, 2009 $17,421,243
provided, however, (i) so long as no Event of Default has occurred and is
continuing, Borrower may make Capital Expenditures in an amount equal to
$6,000,000 at Borrower's operations located in Fresno, California and Turlock,
California and such amounts shall not be included in the calculation of Capital
Expenditures for the 24-month period ending December 31, 2005; (ii) so long as
no Event of Default has occurred and is continuing, Borrower may make Capital
Expenditures in an amount up to $5,000,000 in each Fiscal Year until the
Commitment Termination Date, for purposes of upgrading Borrower's technology or
information systems at its plants, and such amounts shall not be included in the
calculation of Capital Expenditures, (iii) to the extent any component of the
purchase price of any Permitted Acquisition constitutes Capital Expenditures,
such amounts shall not be included in the calculation of Capital Expenditures,
and (iv) the amount of permitted Capital Expenditures referenced above will be
G-1
increased in any period by the positive amount equal to the lesser of (A)
$2,000,000, and (B) the amount (if any), equal to the difference obtained by
taking the Capital Expenditures limit specified above for the immediately prior
period minus the actual amount of any Capital Expenditures expended during such
prior period (the "Carry Over Amount"), and for purposes of measuring compliance
herewith, the Carry Over Amount shall be deemed to be the last amount spent on
Capital Expenditures in that succeeding year.
(b) Minimum Fixed Charge Coverage Ratio. Borrower and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter, a Fixed Charge Coverage Ratio for the 12-month period then ended (or
with respect to the Fiscal Quarters ending on or before March 31, 2004, the
period commencing on January 1, 2004, and ending on the last day of such Fiscal
Quarter) of not less than 1.25 to 1.00.
(c) Maximum Leverage Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter, a Leverage
Ratio as of the last day of such Fiscal Quarter of not more than 2.50 to 1.00.
(d) Minimum Tangible Net Worth. Borrower and its Subsidiaries on a
consolidated basis shall at all times (tested at the end of each Fiscal Quarter)
maintain a Tangible Net Worth of not less than the sum of (i) $16,000,000 plus
(ii) 50% of positive net income measured on a cumulative basis beginning January
4, 2004 (without deduction for losses) and ending on the last day of such Fiscal
Quarter.
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrower, Agents and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrower's and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
G-2
made and deducted as part of the calculation of EBITDA in such period. If
Administrative Agent, Borrower and Requisite Lenders agree upon the required
amendments, then after appropriate amendments have been executed and the
underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Administrative Agent, Borrower and Requisite Lenders cannot agree upon the
required amendments within 30 days following the date of implementation of any
Accounting Change, then all Financial Statements delivered and all calculations
of financial covenants and other standards and terms in accordance with the
Agreement and the other Loan Documents shall be prepared, delivered and made
without regard to the underlying Accounting Change. For purposes of Section 8.1,
a breach of a Financial Covenant contained in this Annex G shall be deemed to
have occurred as of any date of determination by Administrative Agent or as of
the last day of any specified measurement period, regardless of when the
Financial Statements reflecting such breach are delivered to Administrative
Agent.
G-3
ANNEX H (SECTION 9.9(A))
to
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
H-1
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Administrative Agent or GE Capital, at
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Husch & Eppenberger, LLC
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. Rockers
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
and
General Electric Capital Corporation
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇'▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to Borrower, to Borrower, at
Darling International, Inc.
▇▇▇ ▇'▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
I-1
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(C) If to Comerica, at
Comerica Bank
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
If to U.S. Bank National Association, at
U.S. Bank National Association
▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇-▇▇-▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Food & Agribusiness Group
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇.▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
to
CREDIT AGREEMENT
EXHIBIT 1.1(a)(i)
(NOTICE OF REVOLVING CREDIT ADVANCE AND BORROWING AVAILABILITY CERTIFICATE)
Pursuant to the Credit Agreement dated as of April ___, 2004, by and
among the undersigned as Borrower, the persons designated therein as Credit
Parties, the other persons designated therein as Lenders, COMERICA BANK, as
Revolving Credit Agent and Lender, and GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent and Lender (the "Credit Agreement"), the undersigned
certifies that as of the close of business on the date set forth below, the
Borrowing Availability is computed as set forth below.
The undersigned represents and warrants that this Notice of Revolving
Credit Advance and Borrowing Availability Certificate is a true and correct
statement and that the information contained herein is true and correct in all
material respects. The undersigned further represents and warrants that there is
no Default or Event of Default and all representations and warranties contained
in the Credit Agreement and other Loan Documents are true and correct in all
material respects as of the date hereof. The undersigned understands that
Administrative Agent, Revolving Credit Agent and the Lenders will extend loans
in reliance upon the information contained herein. In the event of a conflict
between the following summary of information and what is required under the
Credit Agreement, the Credit Agreement shall govern. Capitalized terms used
herein and not otherwise defined herein shall have the meanings specified in the
Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected or appointed Responsible Officer
of Borrower;
2. I have reviewed the terms of the Credit Agreement and I
have made, or have caused to be made under my supervision, a review
in reasonable detail of the transactions and conditions of Borrower
and its Subsidiaries during the accounting period covered by the
attached SCHEDULE 1;
3. The examinations described in paragraph 2 did not
disclose, and I have no knowledge of, the existence of any condition
or event which constitutes a Default or an Event of Default during or
at the end of the accounting period covered by the attached SCHEDULE
1 or as of the date of this Certificate, except as set forth below;
and
4. SCHEDULE 1 attached hereto sets forth financial data
and computations evidencing Borrowing Availability, all of which data
and computations are true, complete and correct. All computations are
made in accordance with the terms of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Borrower and its Subsidiaries have
taken, are taking, or propose to take with respect to each such condition or
event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The undersigned hereby requests as of __________________ ____, 20__:
____ a LIBOR Loan for a LIBOR Period of __1, __2 or __ 3 months; or
____ an Index Rate Loan;
in an amount equal to $___________________ (such amount cannot be
less than $100,000).
The foregoing certifications and request for advance, together with
the computations set forth in SCHEDULE 1 hereto which is incorporated herein by
this reference, are made and delivered this _______________day of
_______________, 200_.
DARLING INTERNATIONAL INC.
By:_____________________________
Name:___________________________
Title:____________________________
2
SCHEDULE 1
(FINANCIAL DATA SUPPORTING BORROWING AVAILABILITY CERTIFICATE)
A. CONSOLIDATED EBITDA
Calculations based on a consolidated basis for the twelve month period ending on
the last day of the immediately preceding Fiscal Month.
Net Income (loss) After Taxes ____________
+/- After Tax Losses (Gains) on certain Asset sales +/- ____________
+ Interest Expense + ____________
+ Income and Franchise Tax Expense + ____________
+ Depreciation Expense + ____________
+ Amortization Expense + ____________
+/- Other Non-Cash Charges (gains) +/- ____________
EBITDA ____________
B. FUNDED DEBT
Borrower's Funded Debt as of the date of this Notice of Revolving Credit Advance
and Borrowing Availability Certificate is comprised of the following:
Revolving Credit Loans (incl. LC's) ____________
+ Capital Lease Obligations + ____________
+ Term Loans + ____________
+ Guaranteed Indebtedness + ____________
+ Other Indebtedness not covered above + ____________
FUNDED DEBT ____________
3
C. BORROWING AVAILABILITY
Borrowing Availability means as of any date of determination an amount expressed
in Dollars, by which (a) the lesser of (i) the Maximum Amount and (ii) the
Revolving Compliance Maximum, exceeds (b) the Revolving Loan outstanding on such
date:
The lesser of (a)(i) and (a)(ii) as follows:
(a)(i) Revolving Loan Commitment of all Lenders
(Equal to $42,500,000 at Close and subject to adjustment) ________
(a)(ii) Revolving Compliance Maximum
EBITDA (item A above) ____________
x Availability Factor x 2.50
____________
Subtotal ____________
- Funded Debt (item B above) - ____________
(b) Revolving Loan
Revolving Credit Advances ____________
+ Aggregate Letter of Credit Obligations + ____________
Revolving Loan ____________
Lesser of (a)(i) and (a)(ii) above ____________
- (b) Revolving Loan above - ____________
BORROWING AVAILABILITY ____________
4
EXHIBIT 1.1(a)(ii)
TO
CREDIT AGREEMENT
----------------
FORM OF REVOLVING NOTE
----------------------
New York, New York
$------------------
FOR VALUE RECEIVED, the undersigned, DARLING INTERNATIONAL INC., a
Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order of
_______________________ ("Lender"), or its assigns, at the offices of COMERICA
BANK, a Michigan banking corporation as revolving credit agent for Lenders
("Revolving Credit Agent"), at its address at Comerica Bank Commercial Lending
Services, ▇.▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place
as Revolving Credit Agent may designate from time to time in writing, in lawful
money of the United States of America and in immediately available funds, the
amount of _______________________ DOLLARS AND _______ CENTS ($___,___,___) or,
if less, the aggregate unpaid amount of all Revolving Credit Advances made to
the undersigned under the Credit Agreement (as hereinafter defined). All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Credit Agreement or in Annex A thereto.
This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Credit Agreement dated as of April ___, 2004 by and among Borrower,
the other Persons named therein as Credit Parties, Revolving Credit Agent,
Administrative Agent and the other Persons signatory thereto from time to time
as Lenders (including all annexes, exhibits and schedules thereto, and as from
time to time amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), and is entitled to the benefit and security of the Credit
Agreement, the Collateral Documents and all of the other Loan Documents referred
to therein. Reference is hereby made to the Credit Agreement for a statement of
all of the terms and conditions under which the Loans evidenced hereby are made
and are to be repaid. The date and amount of each Revolving Credit Advance made
by Lenders to Borrower, the rates of interest applicable thereto and each
payment made on account of the principal thereof, shall be recorded by Revolving
Credit Agent on its books; provided that the failure of Revolving Credit Agent
to make any such recordation shall not affect the obligations of Borrower to
make a payment when due of any amount owing under the Credit Agreement or this
Note in respect of the Revolving Credit Advances made by Lender to Borrower.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement.
If any payment on this Revolving Note becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
Upon and after the occurrence of any Event of Default, this Revolving
Note may, as provided in the Credit Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.
Time is of the essence of this Revolving Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower.
Except as provided in the Credit Agreement, this Revolving Note may
not be assigned by Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
DARLING INTERNATIONAL INC., a
Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
2
EXHIBIT 1.1(b)
TO
CREDIT AGREEMENT
----------------
FORM OF TERM NOTE
-----------------
New York, New York
$-----------------
FOR VALUE RECEIVED, the undersigned, DARLING INTERNATIONAL INC., a
Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the order of
___________________ ("Lender"), or its assigns, at the offices of GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as administrative agent
for Lenders ("Administrative Agent"), at its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as Administrative Agent
may designate from time to time in writing, in lawful money of the United States
of America and in immediately available funds, the amount of
__________________________ DOLLARS AND _____ CENTS ($___,___,___). All
capitalized terms used but not otherwise defined herein have the meanings given
to them in the Credit Agreement (as hereinafter defined) or in Annex A thereto.
This Term Note is one of the Term Notes issued pursuant to that
certain Credit Agreement dated as of April ___, 2004 by and among Borrower, the
other Persons named therein as Credit Parties, Administrative Agent, Revolving
Credit Agent and the other Persons signatory thereto from time to time as
Lenders (including all annexes, exhibits and schedules thereto and as from time
to time amended, restated, supplemented or otherwise modified, the "Credit
Agreement"), and is entitled to the benefit and security of the Credit
Agreement, the Collateral Documents and all of the other Loan Documents referred
to therein. Reference is hereby made to the Credit Agreement for a statement of
all of the terms and conditions under which the Loans evidenced hereby are made
and are to be repaid. The principal balance of the Term Loan, the rates of
interest applicable thereto and the date and amount of each payment made on
account of the principal thereof, shall be recorded by Administrative Agent on
its books; provided that the failure of Administrative Agent to make any such
recordation shall not affect the obligations of Borrower to make a payment when
due of any amount owing under the Credit Agreement or this Term Note.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times, and pursuant to such calculations, as are specified in the
Credit Agreement.
If any payment on this Term Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Term Note
may, as provided in the Credit Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and payable.
Time is of the essence of this Term Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower.
Except as provided in the Credit Agreement, this Term Note may not be
assigned by Lender to any Person.
THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
DARLING INTERNATIONAL INC., a
Delaware corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
2
EXHIBIT 1.5(e)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Credit Agreement dated as of April
___, 2004 by and among Darling International Inc., a Delaware corporation
("Borrower"), the other Persons named therein as Credit Parties, General
Electric Capital Corporation, a Delaware corporation ("Administrative Agent"),
Comerica Bank, a Michigan banking corporation ("Revolving Credit Agent") and the
Lenders from time to time signatory thereto (including all annexes, exhibits or
schedules thereto, and as from time to time amended, restated, supplemented or
otherwise modified, the "Credit Agreement"). Capitalized terms used herein
without definition are so used as defined in the Credit Agreement.
Borrower hereby gives irrevocable notice to Administrative Agent and
Revolving Credit Agent, pursuant to Section 1.5(e) of the Credit Agreement, of
its request to:
(a) on [ date ] convert $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at the [________] Rate,
into a(n) [________] Loan [and, in the case of a LIBOR Loan, having a LIBOR
Period of [1, 2, or 3] month(s)];
(b) on [ date ] continue $[________]of the aggregate outstanding
principal amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a
LIBOR Loan having a LIBOR Period of [1, 2 or 3] month(s).
IN WITNESS WHEREOF, Borrower has caused this Notice of
Conversion/Continuation be executed and delivered on behalf of Borrower by its
duly authorized officer as of the date first set forth above.
DARLING INTERNATIONAL INC., a
Delaware corporation
By:
--------------------------------
Name:
------------------------------
Title
------------------------------
EXHIBIT 1.18
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT (this "Agreement"), dated as of_____________,
_____, is entered into by and among ____________________________ (the
"Additional Credit Party") and DARLING INTERNATIONAL INC. (the "Company") for
the benefit of GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent (in
such capacity, the "Administrative Agent") and the Lenders as set forth in the
Credit Agreement (defined below).
WITNESSETH
WHEREAS, the Company is a party to that certain Credit Agreement,
dated as of April _____, 2004, by and among the Company, as Borrower,
Administrative Agent, Revolving Credit Agent and the Lenders party thereto (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; all capitalized terms not otherwise defined herein shall
have the meaning set forth in the Credit Agreement as defined below); and
WHEREAS, Administrative Agent and the Lenders have required, among
other conditions set forth in the Credit Agreement, the Additional Credit Party
become a Credit Party under the Credit Agreement that the Additional Credit
Party execute this Agreement;
NOW THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
SECTION 1. The Additional Credit Party hereby acknowledges receipt of
the Credit Agreement and the other Loan Documents.
SECTION 2. By executing and delivering this Agreement, the Additional
Credit Party hereby agrees (a) to become a party to the Credit Agreement as a
Credit Party and to become a Credit Party under and as defined therein, and (b)
to be bound by all the terms, conditions, representations, and warranties of the
Credit Agreement and the other Loan Documents applicable to Credit Parties.
SECTION 3. By executing and delivering this Agreement, the Additional
Credit Party hereby agrees (a) to become a party to the Security Agreement as a
Credit Party and to be bound by all the terms, conditions, representations and
warranties of the Security Agreement applicable to Credit Parties, (b) has
delivered or simultaneously with the execution of this Agreement will cause to
be delivered to Administrative Agent an original fully executed Power of
Attorney as required under the Security Agreement, in form and content
acceptable to Administrative Agent, and (c) authorizes Administrative Agent file
with the appropriate filing office, now or hereafter from time to time,
financing statements covering all assets of the undersigned, including but not
limited to any specific listing, identification, or type of all or any portion
of assets of the undersigned.
SECTION 4. The contents of Disclosure Schedule 3.1 (Type of Entity;
State of Organization), Disclosure Schedule 3.2 (Executive Offices, Collateral
Locations, FEIN), Disclosure Schedule 3.6 (Real Estate and Leases), Disclosure
Schedule 3.7 (Labor Matters), Disclosure Schedule 3.8 (Ventures, Subsidiaries
and Affiliates; Outstanding Stock), Disclosure Schedule 3.11 (Tax Matters),
Disclosure Schedule 3.12 (ERISA Plans), Disclosure Schedule 3.13 (Litigation),
Disclosure Schedule 3.15 (Intellectual Property), Disclosure Schedule 3.17
(Hazardous Materials), Disclosure Schedule 3.18 (Insurance), Disclosure Schedule
3.19 (Deposit and Disbursement Accounts), Schedule 3.21 (Material Agreements),
Schedule 5.1 (Trade Names), Schedule 6.3 (Indebtedness), Schedule 6.4(a)
(Transactions with Affiliates), and Schedule 6.7 (Existing Liens) to the Credit
Agreement are supplemented by the contents of the Supplemental Disclosure
Schedules hereto respectively.
SECTION 5. The contents of Disclosure Schedules to the Security
Agreement and Perfection Certificate attached thereto are supplemented by the
contents of the Security Agreement Supplemental Schedules hereto respectively.
SECTION 6. The Additional Credit Party has delivered a fully executed
Guaranty in form and content acceptable to Administrative Agent guaranteeing the
repayment by Borrower of the Loans and all other Obligations.
SECTION 7. The Company and the Additional Credit Party hereby
represent and warrant to each Lender and Administrative Agent as of the date
hereof that the following statements are true and correct:
(a) as supplemented pursuant to Section 4 above, the representations
and warranties set forth in Section 3 (Representations and Warranties) of the
Credit Agreement and in the other Loan Documents are true and correct on and as
of the date hereof (after giving effect to the addition of the Additional Credit
Party) with the same effect as though made as of the date hereof, except to the
extent such representations and warranties expressly relate to an earlier date;
(b) the Additional Credit Party is organized and existing under the
law of ___________, a state of the United States; and
(c) Borrower and the Additional Credit Party have delivered and
complied with all of the requirements and requests by Administrative Agent under
and pursuant to Section 1.18 and 6.1 of the Credit Agreement.
SECTION 8. This Agreement may be executed and delivered in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original and all of
which taken together shall constitute one and the same original agreement.
Delivery of an executed counterpart of this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9. This Agreement, together with all of the other Loan
Documents and all certificates and documents delivered hereunder or thereunder,
embodies the entire agreement of the parties with the Additional Credit Party
and supersedes all prior agreements and understandings relating to the subject
matter hereof. A set of the copies of this Agreement signed by all parties shall
be lodged with the Company and Administrative Agent.
2
SECTION 10. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES TRIAL BY JURY
IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT.
[SIGNATURE PAGE FOLLOWS]
3
IN WITNESS WHEREOF, the parties to this Joinder Agreement have caused
it to be executed by their duly authorized officers as of the day and year first
written above.
NEW SUBSIDIARY
[---------------------------]
As Additional Credit Party
By:
------------------------------------
Name:
Title:
DARLING INTERNATIONAL INC.
As Borrower
By:
------------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
As Administrative Agent
By:
------------------------------------
Name:
Title:
4
SCHEDULE 3.1
5
SCHEDULE 3.2
6
SCHEDULE 3.6
7
SCHEDULE 3.7
8
SCHEDULE 3.8
9
SCHEDULE 3.11
10
SCHEDULE 3.12
11
SCHEDULE 3.13
12
SCHEDULE 3.15
13
SHCEDULE 3.17
14
SCHEDULE 3.18
15
SCHEDULE 3.19
16
SCHEDULE 3.21
17
SCHEDULE 5.1
18
SCHEDULE 6.3
19
SCHEDULE 6.4(A)
20
SCHEDULE 6.7
21
SCHEDULE 1(A)
22
SCHEDULE 1(B)
23
SCHEDULE 1(C)
24
SCHEDULE 2(A)
25
SCHEDULE 2(B)
26
SCHEDULE 2(C)
27
SCHEDULE 2(D)
28
SCHEDULE 2(E)
29
SCHEDULE 4
30
SCHEDULE 5
31
SCHEDULE 6
32
SCHEDULE 7
33
SCHEDULE 8(A)
34
SCHEDULE 8(B)
35
SCHEDULE 8(C)
36
SCHEDULE 9
37
SCHEDULE 11
38
SCHEDULE 12
39
SCHEDULE 13
40
SCHEDULE 14
41
SCHEDULE 15
42
SCHEDULE 16
43
SCHEDULE 17
44
SCHEDULE 18
45
EXHIBIT 1.19
TO
CREDIT AGREEMENT
----------------
FORM OF ADDITIONAL LENDER ACKNOWLEDGMENT
----------------------------------------
[Date]
Re: Credit Agreement dated as of April ___, 2004, (such Credit
Agreement, as may be amended, restated, supplemented or
otherwise modified hereafter from time to time, the "Credit
Agreement"; capitalized terms not otherwise defined herein
shall have the meaning set forth under the Credit
Agreement), between Borrower, Administrative Agent,
Revolving Credit Agent and the Lenders.
Ladies and Gentlemen:
Pursuant to Section 1.19 of the Credit Agreement, the undersigned
hereby joins in the Credit Agreement for the purposes of becoming a party
thereto as one of the "Lenders" (as defined in the Credit Agreement) and agrees
(i) to undertake all of the obligations of a Lender under the Credit Agreement
and (ii) to provide the Revolving Loan Commitment in the amount set forth below
under the terms and conditions in the Credit Agreement. The undersigned hereby
irrevocably appoints Administrative Agent to act as Administrative Agent and
irrevocably appoints Revolving Credit Agent to act as Revolving Credit Agent for
the undersigned under the Credit Agreement and the other Loan Documents, all in
accordance with Section 9 of the Credit Agreement and the other provisions of
the Credit Agreement and the other Loan Documents.
IN WITNESS HEREOF, the undersigned has executed this Acknowledgment
as of the date first above written.
[LENDER]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Revolving Loan
Commitment Amount: $
--------------
Address for Notices:
Attention:
-----------------------------
Telephone:
-----------------------------
Fax:
-----------------------------
Accepted and Agreed:
DARLING INTERNATIONAL INC., a Delaware
corporation
By:
------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
COMERICA BANK, as Revolving Credit Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
U.S. BANK, as Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
2
EXHIBIT 9.1(a)
FORM OF ASSIGNMENT AGREEMENT
----------------------------
This Assignment Agreement (this "Agreement") is made as of_______ __,
______ by and between __________________________________ ("Assignor Lender") and
________________________ ("Assignee Lender") and acknowledged and consented to
by GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent
("Administrative Agent"),[ and DARLING INTERNATIONAL INC., a Delaware
corporation ("Borrower")]. All capitalized terms used in this Agreement and not
otherwise defined herein will have the respective meanings set forth in the
Credit Agreement as hereinafter defined.
RECITALS:
WHEREAS, Borrower, the other Persons named therein as Credit Parties,
Administrative Agent, Assignor Lender and other Persons signatory thereto as
Lenders have entered into that certain Credit Agreement dated as of April ____,
2004 (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") pursuant to which Assignor Lender has agreed to
make certain Loans to, and incur certain Letter of Credit Obligations for,
Borrower;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a
portion] of its interest in the Loans (as described below), the Letter of Credit
Obligations and the Collateral and to delegate to Assignee Lender [all/a
portion] of its Commitments and other duties with respect to such Loans, Letter
of Credit Obligations and Collateral;
WHEREAS, Assignee Lender desires to become a Lender under the Credit
Agreement and to accept such assignment and delegation from Assignor Lender;
WHEREAS, Assignee Lender desires to appoint Administrative Agent to
serve as agent for Assignee Lender under the Credit Agreement; and
WHEREAS, unless Assignee Lender is a Qualified Assignee, pursuant to
clause (a) of the definition of "Qualified Assignee," Borrower has consented to
such assignment in accordance with and if required by Section 9.1(a)(v) of the
Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions, and covenants herein contained, Assignor Lender and Assignee Lender
agree as follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1. Assignment. Assignor Lender hereby transfers and assigns to
Assignee Lender, without recourse and without representations or warranties of
any kind (except as set forth in Section 3.2), [all/such percentage] of Assignor
Lender's right, title, and interest in [the Revolving Loan ], [the Term Loan],
[the Loans], [Letter of Credit Obligations], Loan Documents and Collateral as
will result in Assignee Lender having as of the Effective Date (as hereinafter
defined) a Pro Rata Share thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
----------------------- ---------------- --------------
Revolving Loan $____________ ____%
Term Loan $____________ ____%
1.2. Delegation. Assignor Lender hereby irrevocably assigns and
delegates to Assignee Lender [all/a portion] of its Commitments and its other
duties and obligations as a Lender under the Loan Documents equivalent to
[100%/___%] of Assignor Lender's Revolving Loan Commitment (such percentage
representing a commitment of $ ___________), and [100%/___%] of Assignor
Lender's Term Loan Commitment (such percentage representing a commitment of $
______).
1.3. Acceptance by Assignee Lender. By its execution of this
Agreement, Assignee Lender irrevocably purchases, assumes and accepts such
assignment and delegation and agrees to be a Lender with respect to the
delegated interest under the Loan Documents and to be bound by the terms and
conditions thereof. By its execution of this Agreement, Assignor Lender agrees,
to the extent provided herein, to relinquish its rights and be released from its
obligations and duties under the Credit Agreement.
1.4. Consent of Borrower. By its execution of this Agreement,
Borrower hereby consents to (a) Assignor Lender's assignment and delegation of
its Commitments and other duties and obligations as a Lender under the Loan
Documents and (b) Assignee Lender's assumption and acceptance of such
Commitments, duties and obligations as set forth herein; provided that such
consent is required under Section 9.1(a)(v) of the Credit Agreement.
1.5. Effective Date. Such assignment and delegation by Assignor
Lender and acceptance by Assignee Lender will be effective and Assignee Lender
will become a Lender under the Loan Documents as of [the date of this Agreement]
("Effective Date") and upon payment of the Assigned Amount and the Assignment
Fee (as each term is defined below).
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1. Payment of the Assigned Amount. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than 12:00 noon (New
York time) on the Effective Date, an amount equal to its Pro Rata Share of the
then outstanding principal amount of the Loans as set forth above in Section 1.1
together with accrued interest, fees and other amounts as set forth on Schedule
2.1 (the "Assigned Amount").
2
2.2. Payment of Assignment Fee. Assignee Lender will pay to
Administrative Agent, for its own account in immediately available funds, not
later than 12:00 noon (New York time) on the Effective Date, the assignment fee
in the amount of $3,500 (the "Assignment Fee") as required pursuant to Section
9.1(a) of the Credit Agreement.
2.3. Execution and Delivery of Notes. Following payment of the
Assigned Amount and the Assignment Fee, Assignor Lender will deliver to
Administrative Agent the Notes previously delivered to Assignor Lender for
redelivery to Borrower and Administrative Agent will obtain from Borrower for
delivery to [Assignor Lender and] Assignee Lender, new executed Notes evidencing
Assignee Lender's [and Assignor Lender's respective] Pro Rata Share[s] in the
Loans after giving effect to the assignment described in Section 1. Each new
Note will be issued in the aggregate maximum principal amount of the
[applicable] Commitment [of the Lender to whom such Note is issued] OR [the
Assignee Lender].
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1. Assignee Lender's Representations, Warranties and Covenants.
Assignee Lender hereby represents, warrants, and covenants the following to
Assignor Lender and Administrative Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its
duties and obligations under this Agreement and the Loan Documents
will not require any registration with, notice to, or consent or
approval by any Governmental Authority;
(c) Assignee Lender is familiar with transactions of the kind and
scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation
and appraisal of the financial condition and affairs of each Credit
Party, has conducted its own evaluation of the Loans and Letter of
Credit Obligations, the Loan Documents and each Credit Party's
creditworthiness, has made its decision to become a Lender to Borrower
under the Credit Agreement independently and without reliance upon
Assignor Lender or Administrative Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the
ordinary course of its business, and is acquiring its interest in the
Loans and Letter of Credit Obligations for its own account and not
with a view to or for sale in connection with any subsequent
distribution; provided, however, that at all times the distribution of
Assignee Lender's property shall, subject to the terms of the Credit
Agreement, be and remain within its control;
3
(f) No future assignment or participation granted by Assignee
Lender pursuant to Section 9.1 of the Credit Agreement will require
Assignor Lender, Administrative Agent, or Borrower to file any
registration statement with the Securities and Exchange Commission or
to apply to qualify under the blue sky laws of any state;
(g) Assignee Lender has no loans to, written or oral agreements
with, or equity or other ownership interest in any Credit Party;
(h) Assignee Lender will not enter into any written or oral
agreement with, or acquire any equity or other ownership interest in,
any Credit Party without the prior written consent of Administrative
Agent; and
(i) As of the Effective Date, Assignee Lender (i) is entitled to
receive payments of principal and interest in respect of the
Obligations without deduction for or on account of any taxes imposed
by the United States of America or any political subdivision thereof,
(ii) is not subject to capital adequacy or similar requirements under
Section 1.16(a) of the Credit Agreement, (iii) does not require the
payment of any increased costs under Section 1.16(b) of the Credit
Agreement, and (iv) is not unable to fund LIBOR Loans under Section
1.16(c) of the Credit Agreement, and Assignee Lender will indemnify
Administrative Agent from and against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, or
expenses that result from Assignee Lender's failure to fulfill its
obligations under the terms of Section 1.15(c) of the Credit Agreement
or from any other inaccuracy in the foregoing.
3.2. Assignor Lender's Representations, Warranties and Covenants.
Assignor Lender hereby represents, warrants and covenants the following to
Assignee Lender:
(a) Assignor Lender is the legal and beneficial owner of the
Assigned Amount;
(b) This Agreement is a legal, valid and binding agreement of
Assignor Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its
duties and obligations under this Agreement and the Loan Documents
will not require any registration with, notice to or consent or
approval by any Governmental Authority;
(d) Assignor Lender has full power and authority, and has taken
all action necessary to execute and deliver this Agreement and to
fulfill the obligations hereunder and to consummate the transactions
contemplated hereby;
(e) Assignor Lender is the legal and beneficial owner of the
interests being assigned hereby, free and clear of any adverse claim,
lien, encumbrance, security interest, restriction on transfer,
purchase option, call or similar right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender
complies, in all material respects, with the terms of the Loan
Documents.
4
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2) nor
Administrative Agent makes any representations or warranties of any kind, nor
assumes any responsibility or liability whatsoever, with regard to (a) the Loan
Documents or any other document or instrument furnished pursuant thereto or the
Loans, Letter of Credit Obligations or other Obligations, (b) the creation,
validity, genuineness, enforceability, sufficiency, value or collectibility of
any of them, (c) the amount, value or existence of the Collateral, (d) the
perfection or priority of any Lien upon the Collateral, or (e) the financial
condition of any Credit Party or other obligor or the performance or observance
by any Credit Party of its obligations under any of the Loan Documents. Neither
Assignor Lender nor Administrative Agent has or will have any duty, either
initially or on a continuing basis, to make any investigation, evaluation,
appraisal of, or any responsibility or liability with respect to the accuracy or
completeness of, any information provided to Assignee Lender which has been
provided to Assignor Lender or Administrative Agent by any Credit Party. Nothing
in this Agreement or in the Loan Documents shall impose upon the Assignor Lender
or Administrative Agent any fiduciary relationship in respect of the Assignee
Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Administrative Agent or Assignor
Lender in the exercise of any power, right, or privilege hereunder or under any
Loan Document will impair such power, right, or privilege or be construed to be
a waiver of any default or acquiescence therein. No single or partial exercise
of any such power, right, or privilege will preclude further exercise thereof or
of any other right, power, or privilege. All rights and remedies existing under
this Agreement are cumulative with, and not exclusive of, any rights or remedies
otherwise available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other
communication required or permitted to be given will be in writing and addressed
to the respective party as set forth below its signature hereunder, or to such
other address as the party may designate in writing to the other.
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision
of this Agreement will be effective without the written concurrence of each of
the parties hereto.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law. In
the event any provision of this Agreement is or is held to be invalid, illegal,
or unenforceable under applicable law, such provision will be ineffective only
to the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
5
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for
convenience of reference only, do not constitute a part of this Agreement for
any other purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument. Delivery of an executed counterpart of this Agreement by telecopier
shall be effective as delivery of a manually executed counterpart of this
Agreement.
[signature page follows]
6
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
------------------------------ ------------------------------
By: By:
------------------------------- -------------------------------
Title: Title:
---------------------------- ----------------------------
Notice Address: Notice Address:
-------------------------- --------------------------
-------------------------- --------------------------
-------------------------- --------------------------
ACKNOWLEDGED AND CONSENTED TO:
ADMINISTRATIVE AGENT: [BORROWER:
GENERAL ELECTRIC CAPITAL DARLING INTERNATIONAL INC.
CORPORATION
By: By:
------------------------------- -------------------------------
Title: Title:
---------------------------- ----------------------------
7
SCHEDULE 2.1
Assignor Lender's Loans Assigned to Assignee Lender
Principal Amount
Revolving Loan $
-------------------
Term Loan $
-------------------
Subtotal $
===================
Accrued Interest $
-------------------
Unused Line Fee $
-------------------
Other + or - $
-------------------
Total $
===================
All determined as of the Effective Date.
8
EXHIBIT E-1
(COMPLIANCE CERTIFICATE)
This Compliance Certificate (this "Certificate") is furnished to
General Electric Capital Corporation, as Administrative Agent pursuant to the
Credit Agreement dated as of April ___, 2004, by and among the undersigned as
Borrower, the persons designated therein as Credit Parties, the other persons
designated therein as Lenders and GENERAL ELECTRIC CAPITAL CORPORATION, as
Administrative Agent and Lender (the "Credit Agreement"; unless otherwise
defined herein, the terms used in this Compliance Certificate have the meanings
ascribed thereto in the Credit Agreement), the undersigned certifies that as of
the close of business on the date set forth below, the following:
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected or appointed Chief Financial Officer or
Treasurer of Borrower;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a review in
reasonable detail of the transactions and conditions of Borrower and
its Subsidiaries during the accounting period covered by the attached
financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event
which constitutes a Default or an Event of Default during or at the
end of the accounting period covered by the attached financial
statements or as of the date of this Certificate, except as set forth
below; and
4. SCHEDULE 1 attached hereto sets forth financial data and computations
evidencing compliance with certain covenants of the Credit Agreement,
all of which data and computations are true, complete and correct.
All computations are made in accordance with the terms of the Credit
Agreement.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which Borrower and its Subsidiaries have
taken, are taking, or propose to take with respect to each such condition or
event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
The foregoing certifications, together with the computations set
forth in SCHEDULE 1 hereto, and which are incorporated herein by this reference,
and the Financial Statements delivered with this Certificate in support hereof,
are made and delivered this _______________day of _______________, 200_.
DARLING INTERNATIONAL INC.
By:
----------------------------------
Name:
---------------------------------
Title:
--------------------------------
2
SCHEDULE 1
(COVENANT CALCULATIONS TO COMPLIANCE CERTIFICATE PURSUANT TO ANNEX G)
A. MAXIMUM CAPITAL EXPENDITURES (TO BE COMPUTED UPON DELIVERY OF ANNUAL AUDITED
FINANCIAL STATEMENTS)
Borrower and its Subsidiaries on a consolidated basis shall not make Capital
Expenditures during the following periods that exceed in the aggregate the
amounts set forth opposite each of such periods:
------------------------- ---------------------- ---------------------- ---------------------
A B C D
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
MAXIMUM ACTUAL LESS AMOUNT CAPITAL
12 MONTH CAPITAL PERIOD UNDER EXPENDITURES
PERIOD ENDING EXPENDITURES AMOUNT NOTES A & B (A - B - C)
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2004 (A), (B), $13,650,000
(C),(D)
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2005 (A), (B), $14,332,500
(C),(D)
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2006 (B), (C),(D) $15,049,125
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2007 (B), (C),(D) $15,801,581
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2008 (B), (C),(D) $16,591,660
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
December 31, 2009 (B) (C),(D) $17,421,243
-------------------------------- ------------------------- ---------------------- ---------------------- ---------------------
Notes: (A) So long as no Event of Default has occurred and is continuing
Capital Expenditures in an aggregate amount equal to $6,000,000 may be
made at Borrower's operations located in Fresno, California and
Turlock, California and such amounts shall not be included in the
calculation of Capital Expenditures for the 24-month period ending
12/31/05.
(B) So long as no Event of Default has occurred and is continuing
Capital Expenditures in an aggregate amount up to $5,000,000 may be
made in each Fiscal Year until the Commitment Termination Date, for
purposes of upgrading Borrower's technology or information systems at
its plants, and such amounts shall not be included in the calculation
of Capital Expenditures.
(C)To the extent any component of the purchase price of any Permitted
Acquisition constitutes Capital Expenditures, such amounts shall not
be included in the calculation of Capital Expenditures, and
(D) The amount of permitted Capital Expenditures referenced above will
be increased in any period by the positive amount equal to the lesser
of (A) $2,000,000, and (B) the amount (if any), equal to the
difference obtained by taking the Capital Expenditures limit specified
above for the immediately prior period minus the actual amount of any
Capital Expenditures expended during such prior period (the "Carry
Over Amount"), and for purposes of measuring compliance herewith, the
Carry Over Amount shall be deemed to be the last amount spent on
Capital Expenditures in that succeeding year.
Compliance with Covenant for Respective Period (Yes/No) ____________
3
B. MINIMUM FIXED CHARGE RATIO (TO BE COMPUTED UPON DELIVERY OF QUARTERLY AND
ANNUAL AUDITED FINANCIAL STATEMENTS)
Borrower and its Subsidiaries shall have on a consolidated basis at the end of
each Fiscal Quarter, a Fixed Charge Coverage Ratio for the 12-month period then
ended (or with respect to the Fiscal Quarters ending on or before March 31,
2004, the period commencing on January 1, 2004, and ending on the last day of
such Fiscal Quarter, of not less than 1.25 to 1.00.
Ratio Numerator (EBITDA less Maintenance CAPEX):
Net Income (loss) After Tax ____________
+/- After Tax Losses (Gains) on certain Asset Sales ____________
+ Interest Expense ____________
+ Income and Franchise Tax Expense ____________
+ Depreciation Expense ____________
+ Amortization Expense ____________
+/- Other Non-Cash Charges (gains) ____________
EBITDA ____________
- Maintenance CAPEX ____________
NUMERATOR: EBITDA MINUS MAINTENANCE CAPEX ____________
Ratio Denominator ("Fixed Charges"):
Interest Expense Paid or Accrued
(excl. Capitalized Interest) ____________
+ Scheduled Payments of Principal on Indebtedness ____________
+ Cash Taxes ____________
+ Payment Amounts Arising from Seller Obligations ____________
DENOMINATOR: FIXED CHARGES ____________
Ratio of EBITDA less Maintenance CAPEX to Fixed Charges ____________
Covenant ____________
Compliance with Covenant (Yes/No) ____________
C. MAXIMUM LEVERAGE RATIO (TO BE COMPUTED UPON DELIVERY OF QUARTERLY AND ANNUAL
AUDITED FINANCIAL STATEMENTS)
Borrower and its Subsidiaries on a consolidated basis shall have, at the end of
each Fiscal Quarter, a Leverage Ratio as of the last day of such Fiscal Quarter
of not more than 2.50 to 1.00.
Ratio Numerator (Funded Debt):
Revolving Credit Loans (incl. LC's) ____________
+ Capital Lease Obligations ____________
+ Term Loans ____________
+ Guaranteed Indebtedness ____________
+ Other Indebtedness Not Covered Above ____________
FUNDED DEBT ____________
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Ratio Denominator (EBITDA on last 12 month basis):
EBITDA (PER CALCULATION ABOVE) ____________
Ratio of Funded Debt to EBITDA ____________
Covenant ____________
Compliance with Covenant (Yes/No) ____________
D. MINIMUM TANGIBLE NET WORTH (TO BE COMPUTED UPON DELIVERY OF QUARTERLY AND
ANNUAL AUDITED FINANCIAL STATEMENTS)
Borrower and its Subsidiaries on a consolidated basis shall at all times (tested
at the end of each Fiscal Quarter and Fiscal Year) maintain a Tangible Net Worth
of not less than the sum of (i) $16,000,000 plus (ii) 50% of positive net income
measured on a cumulative basis beginning January 4, 2004 (without deduction for
losses) and the last day of each Fiscal Year thereafter.
Net Worth:
Total book value of Assets ____________
- Reserves applicable to Assets ____________
- Liabilities ____________
- Adjustments related to FAS 133 and 87 ____________
NET WORTH ____________
- Goodwill and Other Intangible Assets ____________
- Unamortized Debt Discount/Expense ____________
- Treasury Stock ____________
- Revaluation of any Assets ____________
TANGIBLE NET WORTH ____________
Covenant Level:
Minimum Floor $16,000,000
-----------
+ 50% of Positive Net Income Since 1/4/04 ____________
Tangible Net Worth Covenant Level ____________
Compliance with Covenant (Yes/No) ____________
5